I've got a small business (LLC, taxes as a partnership) with $700,000 of revenue and $500,000 of profit.
Company is a husband and wife combo (consultancy), with consultants for other expenses.
I've been thinking about moving over to S-Corp status and paying a steady salary to try to decrease overall tax burden.
I did a simulation in Excel for the S-Corp including payroll taxes on reasonable salaries plus capital gains on the excess distriubtions, and I came out with almost the exact same number keeping our LLC taxed as a partnership.
It's the QBI deduction that is helping us beat the S-Corp with reasonable salary approach. (Yes, if we paid ourselves $20,000 a year in salary the S-Corp would win, but I don't want to get audited, I'm keeping to the 40/60 rule).
Is anyone a tax professional whose run this simulation for a client in 2019 and seen similar results?