https://www.youtube.com/watch?v=ClXdAooQq_Y If anyone wants to hop on: https://riverside.com/studio/neal-mcspaddens-studio?t=cb556e679c1895f4dea4

I've run into two client situations in the last couple of days that hit Section 461 excess business loss limitations. What this limit does, and which was made permanent by the one big beautiful bill, Act of 2025, is that if you have business losses and non-business income, there is a limit. I'm just going to round $300,000 for single filers and $500,000 for joint filers in terms of losses that you can take against the non-business income. If you have a big income event, let's say your W-2 is $1,000,000 and you have a $500,000 business loss, if you're joint then your net income is going to be the $500,000. You're going to pay taxes based on that. If you are a single filer, you're only going to get $300,000 of deductions. The remaining $200,000 will roll over into the future years as a net operating loss carry forward and you're going to pay taxes on $200,000 that you don't have. The character of income and losses does matter and this is yet another example of that.

In what is one of the most important strategies when it comes to tax optimization, I've put together the module on S-Corp optimization. In general the approaches to tax planning go through a couple of different stages: 1. Entity selection. We want to make sure that the right income is in the right types of vehicles in the first place. 2. Deduction maximization. We want to prevent as much net income as possible from occurring in the first place. 3. Optimizing the remainder. That's what this module is about. It's after we're already in an S-Corp, which is going to be the right choice for a lot of people, and after we've applied all of our deduction strategies, like we covered in the Trump accounts, the disaster plans, the accountable plans, and the summit strategy sessions. All those are different deduction strategies and they are there to reduce the net income that is subject to optimization. First and then we get into wages, profits, retirement contributions, and QBI optimizations, and that's what the S-Corp optimization module goes over. Check it out: https://www.skool.com/tax-strategy-network/classroom/a7125fb6?md=fca3ddf161f04745aff90359fc2fe300

I had technical problems with figuring out the skool live thing last week so this week I'll be streaming through riverside to YouTube, LinkedIn, and Facebook. Watch live at https://www.youtube.com/watch?v=KpWbGjfGqAI at noon eastern

I've gotten this question a couple times from clients about whether charity counts outside of the itemized/standard deduction. The answer is that the One Big Beautiful Bill Act (OB3) created a new charitable deduction above the line, similar to how it was temporarily during covid. Starting in tax year 2026 (filed in 2027 and onwards), married-filing-joint filers will be able to claim up to $2k in charitable deductions in addition to their standard deduction. All other filers will be able to claim up to $1k in additional charitable deductions. Note: Donor-advised-fund (DAF) and foundation contributions are specifically excluded from this. It has to be a public charity. Typically that will not be an issue since if you are doing DAF or foundation contributions those would be large enough to itemize. Example: Married-filing-joint Adjusted gross income: $150k Standard deduction: $32,200 Charitable contribution: $1,650 Taxable income = 150,000 - 32,200 - 1,650 = $116,150 So the charitable contribution that normally would have been "lost" in the standard deduction ends up being deducted anyways and reduces the taxable income.