Sep 28, 2026 · 27 min · 10 segments
In episode 62 of How Tax Works, Matt Foreman analyzes the kinds of things that tax lawyers overhear that are often misunderstandings of tax law, and how to think about answering questions about them…
So question one, do you need an LLC to maximize your deductions? And the answer is very clearly no.
And I don't even know how to rationalize it because it really doesn't come from anything.
There is no requirement that you have any sort of entity in order to get more deductions.
And so I think that it's fairly important to understand that you really don't.
I have looked for something that would suggest that having an entity would increase your ability to duck things or anything like that.
And people say, oh, you know, if you have an entity, you know, then you're less likely to get audited.
I just think the people who don't have entities are less likely to be taking it seriously as a business.
If anything, having an entity might help you get the P-Tet, but you need two owners or regarded entity, which is why you have the P-Tet.
So the question becomes, do you need an LLC to maximize your deduction? And the answer is, waiting for the drum roll, no.
So question one, do you need an LLC to maximize your deductions? And the answer is very clearly no.
And I don't even know how to rationalize it because it really doesn't come from anything.
There is no requirement that you have any sort of entity in order to get more deductions.
And so I think that it's fairly important to understand that you really don't.
I have looked for something that would suggest that having an entity would increase your ability to duck things or anything like that.
And people say, oh, you know, if you have an entity, you know, then you're less likely to get audited.
I just think the people who don't have entities are less likely to be taking it seriously as a business.
If anything, having an entity might help you get the P-Tet, but you need two owners or regarded entity, which is why you have the P-Tet.
So the question becomes, do you need an LLC to maximize your deduction? And the answer is, waiting for the drum roll, no.
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