For solo criminal defense and personal injury attorneys

You retainer $400K of fees. The IRS thinks you earned them. They didn't.

You try cases. You don't reconcile IOLTA at 11 p.m. We set cash basis, separate trust from operating, deduct the investigator and expert fees, and stop the PLLC from leaking SE tax that an S-Corp election would have saved.

What solo defense attorneys get wrong (and what we fix)

Law is a Specified Service Trade or Business under §199A, so the QBI deduction phases out above $383,900 MFJ for 2024. But the bigger leak is method: most solo attorneys are on cash basis without realizing retainer deposits sitting in IOLTA are not yet income, contingency fees recognize when earned not when expected, and SE tax on a single-member PLLC eats a salary the S-Corp could have shielded.

IOLTA trust accounting, clean

Client retainer dollars in IOLTA are not your income until earned and transferred to operating. Commingling, premature recognition, or sloppy three-way reconciliation triggers both a bar complaint and an IRS hit. We tie the trust ledger to the operating books and produce monthly reconciliations the bar would accept.

Model Rule 1.15; IRC §451 (income recognition); §61

Cash basis + contingency timing

Most solo PI and criminal attorneys qualify for cash basis under the small-business exception ($30M gross-receipts test for 2024). Contingency fees recognize when the case settles and funds are received, not when the lien is filed. We elect or stay on cash, defer income legitimately, and time the big settlement year.

IRC §448(c); §451; Boyer v. Comm'r 117 TC 240

PLLC vs S-Corp election

A single-member PLLC is a disregarded entity on a Schedule C and every dollar above $168,600 still owes 2.9% Medicare plus 0.9% additional Medicare. Above $150K of net profit, the S-Corp election typically saves $8K to $20K. We confirm your state allows the PLLC-to-S-Corp election (most do) and file Form 2553.

IRC §1362; §1402(a); Treas. Reg. §301.7701-3

Expert witnesses + investigator 1099s

Forensic experts, accident reconstructionists, medical experts, and private investigators are deductible ordinary business expenses. If you pay more than $600 in a calendar year, you owe a 1099-NEC by January 31. Missed 1099s carry $310 per form penalties for 2024. We track every payment and file the right form.

IRC §162(a); §6041, §6041A; §6721 penalties

Malpractice, CLE, bar dues

Malpractice premiums, bar association dues, state CLE fees, Westlaw and Lexis subscriptions, ABA membership, and approved CLE travel are all fully deductible. Court-related mileage and lodging for out-of-county trials qualify under §162. We separate personal CLE travel (Hawaii ABA section meeting plus a week of vacation) so only the business days deduct.

IRC §162(a); §274(d) substantiation; Rev. Rul. 60-16

§199A SSTB band management

Law is an SSTB. The 20% QBI deduction phases out between $383,900 and $483,900 MFJ for 2024. We use Solo 401(k) and cash balance contributions, accountable plan reimbursements, and entity timing to hold taxable income inside the band where the deduction still applies.

IRC §199A(d)(2)(A); Treas. Reg. §1.199A-5(b)(2)(ii)

Real client example

Solo PI and criminal defense attorney, age 39, 5 years out on his own, $310K net profit on a single-member PLLC Schedule C. We filed late S-Corp, set reasonable comp at $135K based on BLS attorney data, and built a Solo 401(k) on the wage.

$28,000 saved

Federal SE tax savings on the S-Corp distribution split, Solo 401(k) deferral at marginal rate, and 1099 cleanup avoided $1,800 in late-filing penalties. State savings on top.

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Disclaimer. This page is general tax information, not advice for your specific situation. Code section references are accurate as of the 2024 tax year and may change. IOLTA trust accounting is governed by state bar rules and intersects with federal tax law in fact-specific ways. S-Corp election timing, reasonable compensation, cash-basis qualification, and §199A SSTB band planning all require facts-and-circumstances analysis. Savings examples are illustrative and based on actual client outcomes but your results will depend on entity structure, income level, state of residence, and documentation quality. Zero Fuss Taxes is the operating brand. We are not your tax advisor until we sign an engagement letter.