Just because your wife's late Uncle Fred the CPA decided on a certain tax strategy for you back in 1998, doesn't mean it's a good idea anymore.

Just because your wife's late Uncle Fred the CPA decided on a certain tax strategy for you back in 1998, doesn't mean it's a good idea anymore.

Someone came to me and asked me to look over his self prepared personal return and partnership return. 

Turns out he had been following his Uncle Fred's strategy faithfully after he passed away. Each year, he simply filled out standard PDF tax forms to self-prepare and replicate the strategy each year. 

The strategy was to file the wife's self-employed business as a partnership between the husband and wife, which had some sort of health insurance benefit back in 1998 and perhaps for a few more years.

It may have been a good strategy back then, but as of now he missed out on thousands in tax savings each year, with no bearing on his health insurance situation. 

Not only did he miss out on filing with S-Corp status, he never realized he could file for the QBI deduction as well.

Uncle Fred would have turned over in his grave had he known this!

We came out that filing for S-Corp status and claiming the QBI deduction (available since 2018) was the best way forward. He was even able to claim S-Corp status and the QBI deduction retroactively and get back taxes paid in prior years. 

Uncle Fred may have been a great accountant, but keep this in mind: 

Old strategies may not make sense for you anymore. 

Your income may have changed drastically, tax law may have changed, as well as other factors you may not be aware of.