We are now closer to tax filing season than ever. Half of the year is gone. Are you ready to get down the Christmas lights? No. Well, Christmas is coming and so is tax season along with new laws, rules and regulations. In December of 2017, the Tax Cuts and Jobs Act of 2017 (TCJA) was passed into law. This legislation significantly reduced the tax rate for corporations while making small reductions in taxes for individuals. Make sure your CPA is working for you!
Most of my clients are closely held entities such as S-Corps, LLCs, LLPs, LLLPs and sole proprietorships. There is a new tax deduction for the owners of pass-through entities under Section 199A which is a deduction for Qualified Business Income or QBI. Eligible taxpayers could receive a 20% deduction for QBI from a business operated as a sole proprietorship or through a partnership, S-corp, trust or estate. The deduction includes several other items such as a deduction for some of their real estate investment trust dividends and qualified publicly traded partnership income. However, for the most part, this could impact your pass-through entity taxable income.
We have your back! We are already looking at each client’s portfolio of businesses to see how this will impact them and if any additional tax planning needs to happen. If needed, you will be contacted so that you, as the taxpayer, can maximize this deduction.
There are rules and limits, but we are familiar with these. Also, as with all new legislation, most guidance and help will come when the IRS starts to process new returns for the 2018 tax year and BEYOND!