Retirement

How to Set Up a PLLC and Make the Most of Your 1099 Income

Are you struggling to make sense of your growing 1099 income? Managing taxes, protecting personal assets, and maximizing financial benefits can feel overwhelming, especially if you’re navigating it alone. For many self-employed professionals and small business owners in Texas, forming a Professional Limited Liability Company (PLLC) and electing S Corporation (S Corp) tax status can simplify these challenges and unlock significant tax savings.

In this guide, we’ll break down how to set up a PLLC, elect S Corp status, and make the most of your 1099 income. With step-by-step advice and expert support from Insogna CPA—one of the top accounting firms in Austin, Texas—you’ll gain clarity and confidence in your financial future.

The Problem: 1099 Income Comes with Complexities

Earning 1099 income provides flexibility and growth potential, but it also introduces unique challenges:

Higher Tax Burdens: Self-employment taxes can significantly cut into your earnings.
Personal Asset Risk: Without proper legal protections, personal assets may be exposed to business liabilities.
Financial Management Stress: Handling income, expenses, and taxes on your own can be time-consuming and error-prone.

Navigating these hurdles requires strategic planning and the right business structure. That’s where a PLLC and S Corp election come in.

The Solution: PLLC Formation and S Corp Tax Status

Step 1: Understand the Benefits of a PLLC

A PLLC is a business entity designed for licensed professionals—such as doctors, lawyers, accountants, and consultants. Here’s why it’s a game-changer:

Liability Protection: Safeguard personal assets from business debts and lawsuits.
Professional Credibility: Enhance trust with clients, partners, and industry peers.
Tax Flexibility: Choose to file as a sole proprietorship, partnership, or elect S Corp status for tax advantages.

By forming a PLLC, you create a solid foundation for protecting your personal finances while streamlining your business operations. Trusted CPA firms in Austin, Texas, like Insogna CPA, specialize in helping professionals set up PLLCs that meet state regulations.

Step 2: How to Set Up a PLLC in Texas

Setting up a PLLC may seem daunting, but breaking it into manageable steps simplifies the process:

Check Eligibility: Ensure you’re a licensed professional and meet Texas’s qualifications for forming a PLLC.
Choose a Name: Select a unique business name that includes “PLLC.” Verify availability on the Texas Secretary of State website.
File a Certificate of Formation: Submit Form 205 to the Texas Secretary of State. The filing fee is $300. Key details include your business name, purpose, and organizer information.
Obtain a Registered Agent: Designate an agent to receive legal documents on your PLLC’s behalf. This can be you, someone you trust, or a professional service.
Apply for an EIN: Get an Employer Identification Number (EIN) from the IRS for free. This is essential for taxes, hiring employees, and opening a business bank account.
Draft an Operating Agreement: While not required in Texas, this document defines your PLLC’s ownership and operational structure, reducing future disputes.
Maintain Compliance: Renew licenses, file annual reports, and pay applicable fees to keep your PLLC in good standing.

If you’re unsure about any of these steps, a trusted Austin TX accountant or tax advisor in Austin can ensure your PLLC is set up correctly and aligned with your financial goals.

Step 3: Elect S Corp Status for Tax Savings

By default, PLLCs are taxed as sole proprietorships or partnerships. However, you can elect S Corp tax status to reduce self-employment taxes and retain more of your income.

Why Choose S Corp Status?

Lower Self-Employment Taxes: Only your salary is subject to Social Security and Medicare taxes, not your entire business profit.
Profit Distribution Advantage: Profits distributed as dividends aren’t subject to self-employment taxes.

How to Elect S Corp Status:

File Form 2553: Submit this form to the IRS within 75 days of forming your PLLC.
Set a Reasonable Salary: As an owner-employee, you must pay yourself a salary that aligns with industry standards.
Consult a CPA: Work with an experienced Austin accounting service to ensure compliance with IRS requirements and optimize your tax strategy.

Step 4: Maximize Your 1099 Income

With your PLLC and S Corp status in place, it’s time to focus on strategies that enhance your financial success:

Optimize Tax Deductions
A CPA can help you identify deductions tailored to Texas professionals, including:

Home office expenses
Health insurance premiums
Retirement contributions to SEP IRAs or Solo 401(k)s

Partnering with one of the best CPA firms in Austin, like Insogna CPA, ensures you capture every available tax-saving opportunity.

Separate Business and Personal Finances
Open a dedicated business bank account. This makes bookkeeping easier, ensures accurate tax filings, and simplifies audits. A small business CPA in Austin, TX can help you establish best practices.
Leverage Technology
Use accounting software or partner with Austin accounting firms to track income, manage expenses, and automate tax reporting.
Build Retirement Wealth
Maximize retirement contributions to benefit from tax-deferred growth while securing your financial future.

The Insogna CPA Advantage

Navigating the complexities of PLLC formation, S Corp election, and 1099 income optimization is challenging, but you don’t have to do it alone. Insogna CPA provides:

Accurate PLLC Formation: Avoid mistakes and delays during setup.
Tax-Saving Strategies: Minimize your tax burden with proactive planning.
Concierge-Level Service: Enjoy personalized, anticipatory support designed to simplify your financial journey.

As one of the top accounting firms in Austin, Insogna CPA is your trusted partner for PLLC formation and comprehensive financial strategies.

Take the First Step Today

Establishing a PLLC and electing S Corp status isn’t just about compliance—it’s about setting yourself up for long-term financial success. Let Insogna CPA guide you through every step, from setup to ongoing tax planning.

Contact us today to schedule a consultation and learn how our accounting services in Austin can help you make the most of your 1099 income.

Take control of your finances with Insogna CPA—your trusted partner for PLLC formation, tax strategy, and business growth.

Maximizing Retirement Contributions as a Business Owner: What You Need to Know

As a business owner, planning for your retirement is just as critical as running your business. Unlike traditional employees who rely on company-sponsored plans, you have the unique opportunity to design a retirement strategy that fits your needs. At Insogna CPA, a trusted Austin, TX accountant, we specialize in helping S Corporation owners and entrepreneurs make the most of their retirement contributions while reducing tax liabilities.

Whether you’re exploring Solo 401(k)s, Traditional 401(k)s, or SEP IRAs, we’ll guide you through your options so you can save smarter and secure your future.

Why Retirement Planning Is Essential for Business Owners

Owning a business gives you control over your income and retirement options. For S Corporation owners, the benefits of proactive retirement planning include:

Tax Savings: Contributions reduce taxable income, which lowers your tax liability. Working with a tax accountant in Austin, like Insogna CPA, ensures you optimize these savings.
Compound Growth: Consistent contributions allow your investments to grow exponentially over time.
Family Benefits: Spousal contributions can double your household savings potential.

As one of the top accounting firms in Texas, we help business owners take control of their financial future through effective retirement planning strategies.

401(k) Options for S Corporation Owners

A 401(k) plan is a powerful tool for S Corporation owners. Here’s how you can benefit:

1. Solo 401(k): Designed for Solopreneurs

If you’re operating without full-time employees, a Solo 401(k) is an ideal solution.

Key Benefits:

High Contribution Limits: Contribute up to $66,000 in 2023 (or $73,500 with catch-up contributions if over 50).
Tax Flexibility: Choose between pre-tax contributions to reduce taxable income or Roth contributions for tax-free withdrawals in retirement.
Spousal Contributions: Include your spouse in the plan to double household savings potential.

Whether you’re seeking advice from a CPA in Austin, Texas or need tailored guidance, Insogna CPA can help you navigate Solo 401(k) plans.

2. Traditional 401(k): Scalable for Growing Teams

For business owners with employees, a Traditional 401(k) allows you to offer benefits while maintaining generous contributions for yourself.

Key Features:

Employer Matching: Attract talent while benefiting from tax-deductible employer contributions.
Safe Harbor Provisions: Simplify compliance and ensure equal benefits for employees and owners.

3. Roth 401(k): Flexible Tax-Free Growth

If you anticipate higher tax rates in retirement, a Roth 401(k) lets you contribute after-tax dollars now and enjoy tax-free withdrawals later. Combining Roth and Traditional 401(k)s offers tax diversification, a strategy recommended by leading Austin CPA firms in Texas.

Amplify Savings with Spousal Contributions

Adding your spouse to your retirement plan is a smart way to enhance savings.

Double the Contributions: Both you and your spouse can contribute up to $22,500 each (plus employer contributions).
Tax Efficiency: Spousal contributions reduce the taxable income of your S Corporation.
Faster Wealth Accumulation: Two accounts compounding over time lead to greater savings.

At Insogna CPA, a leading Austin accounting service, we ensure your retirement plans maximize tax advantages for your entire household.

Additional Retirement Planning Options

1. SEP IRAs: Simplified for Small Business Owners

A Simplified Employee Pension (SEP) IRA offers flexibility for fluctuating income years, making it perfect for small business owners.

Features:

Contribute up to $66,000 annually.
Minimal reporting requirements compared to a 401(k).

While SEP IRAs don’t allow employee contributions, they remain a valuable tool for entrepreneurs.

2. Defined Benefit Plans: Maximize Savings

For high-income earners nearing retirement, Defined Benefit Plans offer the chance to contribute significantly more than a 401(k) or IRA.

Advantages:

Tax Efficiency: Contributions dramatically lower taxable income.
Customizable Benefits: Plans are tailored to your retirement goals.

Tax Benefits for S Corporation Owners

Maximizing your retirement contributions provides key tax advantages:

Lower Pass-Through Income: Employer contributions reduce your S Corporation’s net income, lowering your personal tax rate.
Self-Employment Tax Savings: Structuring contributions effectively minimizes self-employment taxes.
Tax Credits: Establishing a new plan may qualify you for the Retirement Plans Startup Costs Tax Credit, worth up to $5,000 annually.

Our team, one of the best CPA firms in Austin, ensures you capitalize on every available tax benefit.

Retirement Planning Best Practices

Start Early: The sooner you contribute, the more time your investments have to grow.
Diversify Contributions: Combine Traditional, Roth, and spousal contributions for balanced growth.
Collaborate with Experts: Work with a small business CPA in Austin, TX to align your plan with your income and financial goals.

Common Questions About Retirement Plans

Can I contribute to a Solo 401(k) and an IRA?
Yes, but IRA deductions may be limited if you exceed income thresholds while participating in a 401(k).
How much should I contribute?
Your ideal contribution amount depends on income, cash flow, and tax strategy. Consult a tax advisor in Austin for personalized guidance.
What happens if I hire employees?
You’ll need to transition from a Solo 401(k) to a Traditional 401(k) to ensure compliance with IRS rules.

Secure Your Financial Future with Insogna CPA

At Insogna CPA, one of the top accounting firms in Austin, Texas, we specialize in helping S Corporation owners and business professionals optimize their retirement contributions. From Solo 401(k)s to Defined Benefit Plans, we provide tailored solutions that maximize savings and minimize taxes.

Ready to take the next step? Contact Insogna CPA today for personalized accounting services in Austin that align with your business goals and retirement dreams.

Your 2024 Tax Strategy: Essential Steps for 1099 Earners Before Year-EnD

As 2024 approaches, independent contractors and freelancers have a limited window to finalize their year-end tax planning. Proactive tax strategies can save you thousands, help you avoid penalties, and set you up for success in the new year.

At Insogna CPA, a leading Austin, TX accountant, we specialize in helping small business owners and freelancers navigate these critical steps. This checklist outlines everything you need to know to optimize your taxes before December 31.

1. Review Your Business Structure

The type of business entity you operate—sole proprietorship, LLC, or S-Corp—affects your tax liability.

Why It Matters:
- LLCs and S-Corps can offer tax advantages such as self-employment tax savings and liability protection.
- S-Corps allow you to split income into a salary and dividends, reducing overall taxes.
Action Step: Consult a trusted CPA in Austin, Texas to determine if forming an LLC or electing S-Corp status is right for you in 2024.

2. Catch Up on Estimated Tax Payments

The IRS requires 1099 earners to make quarterly payments. Missing these deadlines can result in penalties.

How to Check:
- Add up your total income and calculate taxes owed so far.
- Compare with your payments made this year.
- Use IRS Form 1040-ES to identify any shortfalls.
Action Step: Make catch-up payments by January 15, 2024, to avoid penalties. Need guidance? Contact an Austin small business accountant for tailored advice.

Maximize Retirement Contributions

Retirement contributions are an excellent way to lower taxable income while preparing for your future.

Options for 1099 Earners:
- Solo 401(k): Contribute up to $22,500 ($30,000 if over 50) as an employee, plus up to 25% of profits as an employer, capped at $66,000.
- SEP IRA: Deduct up to 25% of net earnings, with a $66,000 limit.
- Traditional IRA: Contribute $6,500 ($7,500 if over 50), subject to income limits.
Action Step: Maximize your contributions before year-end with guidance from an experienced tax advisor in Austin.

4. Claim End-of-Year Deductions

Deducting eligible expenses lowers your taxable income, reducing your overall tax bill.

Common Deductions for 1099 Earners:
- Home office expenses are proportional to square footage.
- Business equipment or software purchased before December 31.
- Professional development, mileage, and travel costs.
Action Step: Use a reliable Austin accounting service to audit your records and ensure you don’t miss valuable deductions.

5. Invest in Your Business

Year-end is the perfect time to make business purchases that reduce your taxable income and support growth.

Examples of Strategic Investments:
- Upgrade office technology such as computers or software.
- Prepay for professional subscriptions, memberships, or marketing services.
- Purchase inventory or materials needed for early 2024.
Bonus Tip: Leverage Section 179 to deduct the full cost of qualifying equipment. A CPA South Austin professional can guide you through this process.

6. Audit-Proof Your Records

Maintaining organized records ensures compliance and maximizes deductions.

Steps to Take:
- Ensure receipts, invoices, and mileage logs are complete.
- Reconcile accounting software with bank statements.
- Verify all records meet IRS standards with support from a top accounting firm in Austin, Texas like Insogna CPA.

7. Plan for Healthcare Costs

Medical expenses exceeding 7.5% of your adjusted gross income can be deducted.

Action Step: Pay outstanding bills or schedule elective procedures before December 31 to maximize this deduction. Work with an Austin TX CPA firm for detailed advice.

Why Work with Insogna CPA?

At Insogna CPA, one of the best CPA firms in Austin, we simplify year-end tax planning for 1099 earners. Here’s how we help:

Proactive Planning: From business restructuring to retirement contributions, we ensure you’re prepared for deadlines.
Tailored Strategies: Our Austin accounting services align with your income trends and industry-specific needs.
Audit-Ready Documentation: Our team ensures your records are accurate and IRS-compliant.

The clock is ticking on your 2024 tax strategy. Don’t leave money on the table—partner with Insogna CPA, a trusted accounting firm in Austin, to take control of your taxes.

Contact us today to create a personalized plan and discover why we’re one of the top accounting firms in Texas for freelancers and small business owners.

Your Trusted CPA Partner: Stepping Up for Fired Bench.co Customers

On December 27, 2024, Bench.co announced they are shutting down services effective immediately. This sudden closure leaves businesses using Bench.co without finalized 2024 financials—a critical requirement for preparing 2024 taxes. For customers accustomed to unsustainably low pricing, unpredictable service, and a proprietary bookkeeping platform, this serves as a stark reminder: you get what you pay for.

The real urgency? Bench customers have only 10 weeks to download their accounting data before the platform becomes permanently inaccessible. However, even with this downloaded data, Bench.co users face another challenge: incomplete and unreconciled 2024 financials. Since Bench used a proprietary accounting system, we leverage a third-party tool to migrate data to QuickBooks Online, the industry standard we use exclusively for daily bookkeeping. While this migration helps recover your data, additional cleanup is essential to get your 2024 financials fully prepared for tax filings.

At Insogna CPA, we’re here to help you navigate this transition and proactively tackle these challenges. Since 2011, we’ve been committed to transparency, continuity, and accessibility in everything we do. Using trusted, third-party platforms like QuickBooks Online, we ensure you always have 24/7/365 access to your data. You’ll never worry about being locked out or left in the dark, allowing your business to continue running smoothly—no matter what.

Here’s why Insogna CPA is the right fit for your business:

Scalable Expertise: Our experienced team handles everything from daily data entry and monthly reconciliation to real-time cash flow forecasting. These efforts drive strategic tax planning, helping you maximize savings and achieve your financial goals.
Personalized, Concierge-Level Support: Partner with a dedicated team that understands your business inside and out, offering expert guidance throughout the year—not just during tax season.
Unlimited, Proactive Communication: Stay informed and ahead with customized video updates and timely financial reports delivered daily, weekly, or monthly—designed to help you make smarter decisions.
Firm of the Future: We continuously vet the best software solutions to optimize efficiency. With full login access to your financials, you’re always in control and can get the answers you need, whenever you need them.

We are already successfully guiding businesses through this Bench.co transition and stand ready to help you rebuild your financials in QuickBooks Online, close out your 2024 books, and prepare for the year ahead with confidence.

At Insogna CPA, you’re not just another client—we’re your trusted CPA partner. Serving hundreds of businesses every month, we pride ourselves on proactive communication and unwavering support, so you can focus on running and growing your business.

Time is critical. Ready to see how accounting should be done? Contact Insogna CPA today to ensure your 2024 financials are ready for tax filing deadlines. Let’s start 2025 on the right foot—together.

How to Optimize Your Retirement Savings as a Self-Employed Professional

Being self-employed comes with incredible freedom and flexibility, but it also means taking full
responsibility for your financial future—especially when it comes to retirement. Without access
to employer-sponsored plans like 401(k)s or pensions, you must create and manage your own
retirement strategy.
The good news? This autonomy gives you the chance to design a plan that aligns perfectly with
your goals, income, and business structure. By understanding options like SEP IRAs, Solo
401(k)s, and Traditional IRAs, you can make informed choices to maximize your savings while
minimizing taxes. At Insogna CPA, a leading Austin TX accounting firm, we specialize in
helping self-employed professionals like you navigate these decisions with clarity and
confidence.

Retirement Options for Self-Employed Professionals

Let’s break down three of the most popular retirement savings options available to self-
employed individuals: SEP IRAs, Solo 401(k)s, and Traditional IRAs.

SEP IRAs: Simplicity with High

Contribution Limits
A Simplified Employee Pension (SEP) IRA is an excellent choice for self-employed
professionals and small business owners looking for a straightforward way to save.
How it Works
With a SEP IRA, you can contribute up to 25% of your net earnings (up to $66,000 in 2023).
Contributions are flexible and tax-deductible, which means you can lower your taxable income
while investing in your future.

Ideal for LLCs and S-Corps

● If you operate as an LLC, your contributions are based on self-employment income after
deducting half of your self-employment taxes.
● S-Corp owners can make employer contributions through the business, reducing taxable
income at the corporate level.
Considerations
● Contributions must be uniform for all eligible employees. If your LLC or S-Corp has staff,
you’ll need to match the same percentage of their salaries as you contribute for yourself.
● SEP IRAs don’t allow catch-up contributions for those over 50, which may limit savings
potential for older professionals.
Insogna CPA, a trusted tax accountant in Austin, can help ensure you’re making the most of
this plan’s flexibility while staying compliant with IRS regulations.

Solo 401(k): Maximum Savings Potential

The Solo 401(k) is tailored for self-employed individuals with no full-time employees (apart from
a spouse). This plan offers the highest contribution limits, making it ideal for high earners.

How it Works

Solo 401(k)s allow you to contribute both as an employee and as an employer:
● Up to $22,500 as an employee in 2023 (plus $7,500 in catch-up contributions if you’re
over 50).
● Employer contributions of up to 25% of your compensation, with total contributions
capped at $66,000 (or $73,500 with catch-up).
Key Advantages
● Roth Option: Many Solo 401(k)s allow Roth contributions, enabling you to invest after-
tax dollars for tax-free withdrawals in retirement.
● Loan Provisions: Unlike SEP IRAs, Solo 401(k)s often allow you to borrow against your
account balance, providing a financial safety net.
Best Fit for LLCs and S-Corps
● LLC owners calculate contributions based on net self-employment income after
deducting half of their self-employment tax.
● S-Corp owners use W-2 wages to determine contributions, combining employee
deferrals and employer contributions for tax efficiency.
Considerations
● Solo 401(k)s involve more paperwork and may require filing Form 5500 if assets exceed
$250,000.
● Hiring employees disqualifies you from the Solo 401(k), requiring a transition to a
traditional 401(k).
Whether you’re looking for a CPA firm in Austin Texas or need expert advice on Solo 401(k)
plans, Insogna CPA offers personalized support to help you make the right decisions.
Traditional IRAs: Accessibility and Versatility
A Traditional IRA is a straightforward and widely available retirement option, offering tax-
deferred growth on your investments.
How it Works
You can contribute up to $6,500 annually ($7,500 if over 50) in 2023. Contributions may be tax-
deductible depending on your income and participation in other retirement plans.
Advantages
● Universal Eligibility: Traditional IRAs are available regardless of your business
structure, making them accessible to both LLC and S-Corp owners.
● Ease of Use: Traditional IRAs require minimal administrative effort, making them ideal
for those seeking simplicity.
Considerations
● Lower contribution limits may not be sufficient for high-income earners.
● Deductibility phases out at higher income levels if you’re covered by another retirement
plan.
Our Austin accounting firm provides expert guidance to help you integrate Traditional IRAs
into a broader retirement strategy.
Choosing the Right Plan for Your Needs
How do you decide which plan is best for you? It depends on your income, business structure,
and financial goals. Here’s a quick guide:
● High Earners with Fluctuating Income: A SEP IRA provides flexibility to adjust
contributions based on cash flow.
● Maximizing Savings: Solo 401(k)s offer the highest contribution limits, ideal for
consistent and high earners.
● Simplicity: A Traditional IRA is perfect for those who value ease of setup and
maintenance.
● Tax Diversification: Opt for a Solo 401(k) with a Roth option to balance current tax
deductions with future tax-free withdrawals.
Integrating Retirement Planning with Business Structure
LLC Owners
Contributions are calculated based on net self-employment income. Pairing a SEP IRA or Solo
401(k) with your LLC can help you optimize both personal and business tax strategies.
S-Corp Owners
S-Corp owners can use W-2 wages to strategically structure Solo 401(k) or SEP IRA
contributions, minimizing corporate profits and self-employment taxes while maximizing
retirement savings.
As one of the top accounting firms in Texas, Insogna CPA can guide you in integrating
retirement plans with your specific business structure.
Secure Your Future with Insogna CPA
Planning for retirement as a self-employed professional can feel overwhelming, but you don’t
have to navigate it alone. At Insogna CPA, one of the best CPA firms in Austin, we make
complex financial decisions simple and empowering.
Whether you’re choosing a SEP IRA, Solo 401(k), or Traditional IRA, our expert team offers
tailored accounting services in Austin to help you maximize savings and minimize taxes.
Ready to take the first step toward securing your financial future? Contact Insogna CPA
today for a consultation and discover how our trusted Austin TX CPAs can help you
achieve your goals.

Call Us Now

Ask A Question

Capital Gains Planning: How to Protect Wealth from Big Tax Hits

When it comes to selling a stake in your business or managing long-term investments, capital gains taxes can take a significant bite out of your profits. If you’re not careful, these taxes can erode the wealth you’ve worked so hard to build. Fortunately, with the right strategies, you can minimize your tax liability, keep more of your earnings, and reinvest in your financial future.

At Insogna CPA, one of the best CPA firms in Austin, we specialize in helping business owners navigate the complexities of capital gains taxes with confidence and clarity. Located in South Austin, we offer personalized accounting services tailored to your unique financial situation.

❓ What Are Capital Gains Taxes?

Capital gains are the profits earned when you sell an asset—such as real estate, stocks, or a stake in your business—for more than its purchase price. The tax rate you’ll pay on these gains depends on how long you’ve held the asset.

Short-Term Capital Gains: If you’ve owned the asset for less than a year, the profits are taxed as ordinary income, which can range from 10% to 37%.
Long-Term Capital Gains: Assets held for over a year qualify for lower tax rates, typically between 0% and 20%, based on your taxable income.

Additionally, high earners may face the Net Investment Income Tax (NIIT), an additional 3.8% on top of their capital gains tax.

Our team at Insogna CPA, a leading Austin TX accounting firm, can help you understand how these rates impact your specific financial situation and develop strategies to reduce your tax burden.

💡 Strategies to Minimize Capital Gains Taxes

Let’s explore the proven strategies business owners can use to keep more of their profits while staying compliant with tax laws.

1. Time the Sale of Assets Strategically

Timing is everything. Selling your assets at the right time can have a significant impact on your tax bill.

📌 Hold for Long-Term Gains: Always aim to hold assets for more than a year to qualify for the lower long-term capital gains tax rate.
📌 Income Smoothing: Consider selling during a year when your taxable income is lower, such as after retirement or in a year with fewer other sources of income.

Our Austin tax advisors can help you time your sales strategically to maximize your tax savings.

2. Use Installment Sales for Business Stakes

If you’re selling a significant portion of your business, an installment sale can spread out the tax burden over several years.

📌 How It Works: Instead of receiving the full payment upfront, you structure the sale to receive payments over time.
📌 The Benefit: This allows you to report the gains incrementally, keeping you in a lower tax bracket each year.

We offer specialized expertise in this area as part of our accounting services in Austin for business owners.

3. Leverage Qualified Opportunity Zones

Opportunity Zones offer a unique way to defer and reduce capital gains taxes while supporting community development.

📌 Tax Deferral: By reinvesting your gains in a Qualified Opportunity Fund, you can defer taxes on the original gain until 2026 or until the new investment is sold.
📌 Tax-Free Growth: If the new investment is held for at least 10 years, any additional gains on that investment are entirely tax-free.

As one of the top CPA firms in Austin Texas, we can guide you through the Opportunity Zone process and its potential benefits.

4. Gifting Appreciated Assets

If you’re planning to share your wealth with family or give to charity, gifting appreciated assets can be a smart tax strategy.

📌 Family Gifting: Transferring assets to family members in lower tax brackets can reduce the overall tax liability.
📌 Charitable Contributions: Donating appreciated assets to a qualified charity eliminates capital gains taxes on the gifted portion and provides a tax deduction for the asset’s full market value.

Looking for a CPA in Austin Texas to help implement these strategies? Insogna CPA offers tailored solutions for small businesses and high-net-worth individuals.

5. Offset Gains with Tax-Loss Harvesting

You can reduce your taxable gains by selling underperforming assets to realize losses.

📌 How It Works: Capital losses can offset your capital gains dollar-for-dollar. If your losses exceed your gains, you can use up to $3,000 annually to offset ordinary income.
📌 Future Savings: Any unused losses can be carried forward to reduce taxable gains in future years.

Special Considerations for Business Owners

Section 1202 Qualified Small Business Stock (QSBS) Exclusion

If you’ve invested in a C Corporation that qualifies as a small business, you may be eligible to exclude up to 100% of the gains from your federal taxes.

Eligibility: The stock must be held for at least five years, and the corporation must meet specific criteria outlined under Section 1202.
The Impact: For qualifying stocks, you can exclude up to $10 million or 10 times your basis in the stock, whichever is greater.

Our Austin small business accountants can help you determine if your stock qualifies for this exclusion and guide you through the process.

S Corporation Tax Planning

As an S Corporation owner, you have unique opportunities to manage capital gains:

Basis Management: Maximize the use of your stock basis to minimize taxable gains when selling your stake.
Installment Sales: Spread gains over multiple years to reduce the immediate tax impact and manage cash flow effectively.

Partnering with Insogna CPA

Capital gains planning is complex, but with Insogna CPA—a trusted Austin accounting firm—you can make informed decisions that protect your wealth and minimize tax liabilities. Our team offers comprehensive accounting services to business owners across Texas, from small businesses to high-net-worth individuals.

Whether you need help with tax-loss harvesting, gifting strategies, or Opportunity Zone investments, our Austin TX accountants have the expertise to guide you every step of the way.

Ready to safeguard your wealth from big tax hits? Contact Insogna CPA today to schedule a consultation with one of the best CPAs in Austin!