You just add all the Box 5 amounts together and report the total on Form 8995. You don't need to list each brokerage separately for the QBI deduction.

That's really helpful, thanks! I'm curious - do you remember roughly what percentage of your total dividends the Box 5 amount represented? I'm trying to get a sense of whether this is typically a small portion or if it can be a significant chunk of your dividend income. My Box 5 shows about $180 this year, so I'm wondering if that $36 deduction (20% of $180) is worth upgrading my TurboTax version for.

That's really interesting. I've considered S-Corp before for self-employment tax savings but never connected it to QBI benefits. Do you know if there are any downsides to this approach specifically for engineering practices? And does the "reasonable compensation" requirement create any special challenges for professional service businesses?

For engineering practices specifically, the main consideration is making sure your salary truly meets the "reasonable compensation" standard. The IRS scrutinizes professional service businesses more closely on this point. For someone with your income level, you'd want to research comparable salaries for structural engineers in your area with your experience. You probably need to justify a salary of at least $150-200k to avoid red flags. The downside is you'd pay a bit more in Medicare taxes on the salary portion since you can't avoid the additional 0.9% Medicare on high incomes through S-Corp structuring. Another consideration is that some states (like California) impose additional taxes or fees on S-Corps that might eat into your savings. You'll also have more administrative requirements - separate payroll, more complex bookkeeping, etc. But overall, for most engineers at your income level, the combined SE tax savings and QBI optimization through S-Corp structuring usually outweigh these downsides significantly.

Yes! This was a game-changer for my architecture practice. I had a main design firm (S-Corp with employees) and a separate consulting business (sole prop, no employees). By aggregating them, I was able to apply the W-2 wages from the S-Corp across both businesses for QBI purposes. Just make sure you meet the 50% common ownership requirement and the other tests for aggregation (like having the same tax year). You'll need to file an annual election with your tax return. Form 8995-A has a section specifically for aggregation.

That's super helpful, thanks! Did you need to work with a specialized CPA to get the aggregation right? I'm worried my regular tax guy might not be familiar enough with these specific QBI rules for architects.

Great point about adding memo fields for the tax year! I'm actually dealing with that exact confusion right now since I made my 2024 contribution in January 2025. Quick question - when you mention the 25% limit for profit sharing, are you calculating that based on net earnings from self-employment after the SE tax deduction? I've been using my Schedule C net profit but wondering if I should be using the adjusted amount that goes to Schedule SE instead. Want to make sure I'm not overcontributing accidentally. Also, do you happen to know if there's a specific IRS publication that spells out the calculation methodology clearly? I've been piecing together information from different sources and would love a definitive reference.

You're absolutely right to question that calculation! For the profit-sharing portion, you need to use your net earnings from self-employment AFTER the SE tax deduction, not just your Schedule C net profit. Here's the flow: Schedule C net profit → minus 1/2 of SE tax → equals net earnings from self-employment → multiply by 25% = maximum profit-sharing contribution. The definitive reference you're looking for is IRS Publication 560 "Retirement Plans for Small Business." Chapter 5 specifically covers SEP, SIMPLE, and Qualified Plans, including Solo 401(k)s. It has the exact calculation worksheets and examples for determining contribution limits. Also check out Form 5500-EZ instructions if your plan assets exceed $250,000 - they have some good calculation examples too. The key thing to remember is that the 25% is applied to your compensation as defined for retirement plan purposes, which includes that SE tax adjustment. Better to be conservative on these calculations since overcontributions can create tax headaches that are much worse than slightly undercontributing!

Thanks for sharing your naming convention - that's really helpful! I like how "Owner Equity - 401k Employer Contribution" and "Owner Equity - 401k Employee Contribution" makes the distinction super clear. I'm curious about your timing approach of making the journal entry on the same day as the transfer. Do you ever run into situations where the 401k provider takes a few days to process the contribution? I've been making my journal entries when I initiate the transfer, but sometimes there's a lag before it actually shows up in my 401k account. Just wondering if that creates any reconciliation issues for you or if you have a way to handle that timing difference. Also, have you found that CPAs generally prefer this level of detail in the equity accounts, or do some of them just want to see the total retirement contribution amount? I'm trying to decide how granular to get with my chart of accounts setup.

How frequently would you need to be selling for the IRS to consider it a business? I probably sell maybe 5-10 gift cards a year that I receive and don't want. Should I be worried?

There's no specific number that automatically triggers "business" classification, but 5-10 cards a year would generally be considered personal use, not a business activity. The IRS looks at factors like: Are you doing this to make a profit? Are you putting significant time into it? Are you keeping formal records? Are you depending on the income? Occasionally selling unwanted personal gift cards doesn't check any of those boxes, so you're fine. I've sold 15+ cards some years without issue. It would be different if you were buying cards at a discount specifically to resell them - that would likely be considered a business activity.

This makes sense to me. But what about gift cards I got from work as performance bonuses? Those were already taxed on my paycheck when I received them, so I'm assuming selling them wouldn't create any new tax issues?

This is really helpful! I'm curious about your application process - how do you handle situations where multiple families apply but you don't have enough funds to help everyone? Do you prioritize based on tournament level (like nationals vs regionals) or purely on financial need? Also, the 75% cap is a smart approach. We were debating whether to cover full expenses or partial, and your reasoning makes a lot of sense. Having families maintain some financial investment probably helps with accountability too.

Great question! When we have more applications than available funds, we use a scoring system that weighs both financial need and tournament significance. We assign points for need level (based on documentation provided) and tournament type (nationals get highest points, regionals second, etc.). This helps us make objective decisions that we can defend if questioned. We also maintain a waitlist system - if additional funds become available during the year or if families decline assistance, we can help the next families in line. This has worked well for transparency and fairness. The 75% cap has been crucial for accountability. Families are much more likely to submit proper expense documentation and stay within reasonable spending limits when they have their own money invested. We've found it actually reduces administrative burden compared to our old system of case-by-case full reimbursements.

This is incredibly helpful, thank you! The 200% of federal poverty level guideline is exactly the kind of objective criteria I was looking for. Our board has been struggling with how to define "families in need" without being too subjective or invasive. I really like your point about requiring some family contribution - even a small amount shows investment and probably helps families feel more dignified about accepting assistance rather than feeling like charity recipients. The equal access across all programs is something we definitely need to be mindful of. We have both recreational and competitive teams, and I can see how it would be easy to inadvertently favor one over the other if we're not careful about our policies. One follow-up question: when you say your accountant compliments the program during annual review, does that mean this gets reported somewhere specific on your Form 990, or is it just reflected in your general program expenses?