Yes, S-Corps are eligible for the 20% Qualified Business Income deduction. The same income thresholds apply ($170,050 for single filers and $340,100 for joint filers in 2025). Above those thresholds, limitations based on W-2 wages and qualified property start to phase in. Actually, this is where S-Corps can have an advantage over sole props for high earners. Since you're paying yourself a W-2 salary, that can help you qualify for larger QBI deductions if you're over the income threshold. It's a bit complicated but basically your W-2 wages to yourself can help satisfy the wage limitation tests.

Thank you for mentioning QBI! I didn't even know about that deduction. Do both of my businesses qualify for that? And would I apply it to each Schedule C separately?

Yes, both of your businesses should qualify for the QBI deduction as they're both reported on Schedule C. The deduction is actually calculated on your total qualified business income across all qualifying businesses, not on each Schedule C separately. The basic calculation is 20% of your net business income (after expenses), but there are income thresholds where it starts to phase out or get more complicated (over $170,700 for single filers in 2024, which doesn't sound like it applies to you). This deduction alone could significantly reduce what you owe, possibly explaining the high amount you saw on the first website you tried.

Which tax software did you use? I tried [popular tax software] and it didn't explain anything about allocating home office expenses between multiple businesses.

Do you know if Cash App Tax has import features? I've heard mixed things but thinking about trying it this year.

Cash App Tax does have some import capabilities, but not as extensive as TurboTax. Last I checked, they could import W-2s by taking a picture, and they can import some 1099s from major brokerages like Robinhood and a few others. The coverage isn't nearly as comprehensive as TurboTax though, which can connect to hundreds of financial institutions. If you have accounts at smaller or less common brokerages, you might still need to enter things manually with Cash App Tax.

The free versions often miss deductions though. My cousin works for H&R Block and says they train them to upsell because the free version is designed to be incomplete.

Thanks for the suggestion! My health insurance premium did actually increase slightly during this period, but the pretax deduction amount seems correct. I'll definitely double-check my state withholding though - I hadn't even thought to look at that separately! I'm in Minnesota, and now that you mention it, the state withholding does look a bit different on the new paystubs compared to federal. I'll compare the percentages to make sure everything adds up.

This is good advice. I work in HR and I can tell you we WANT to know about these issues. Sometimes during system migrations, default settings get applied instead of employee-specific ones. We can't fix what we don't know about!

That's a really good point! My investment return has been about 11% annually while my loan interest is around 7%, so I've been ahead so far. But you're right about the risk - a market downturn could flip this equation quickly. Are there any strategies you use now to protect against that kind of scenario?

I maintain a much lower margin percentage now - never more than 20% of my total portfolio value. This gives me enough cushion to withstand even a severe market correction without facing a margin call. I also set up automatic alerts to notify me when my margin utilization crosses certain thresholds. This helps me stay proactive rather than reactive. And I keep a portion of my portfolio in less volatile investments that can provide stability during market turbulence - this has saved me several times when tech stocks took a nosedive.

Investment interest expense doesn't go on Schedule A anymore - it goes on Form 4952 and then the deductible amount transfers to Schedule A. But your point about the standard deduction is valid. For me, between state/local taxes, mortgage interest, and charitable contributions, I'm already itemizing, so investment interest deductions are definitely worthwhile. But if you're not already over the standard deduction threshold, you're right that this strategy might not matter much.

Thanks for the Form 4952 clarification - shows how long it's been since I've done this! I wasn't aware of the form change. You make a good point about already itemizing for other reasons. I forget that in high-tax states or with large mortgages, many people easily exceed the standard deduction. I'm in a no-income-tax state with a paid-off house, so I rarely have enough deductions to itemize anymore.