Is your taxable income above $160,700, or above $321,400 on a joint return?
Well, first of all, congratulations!
But before you break out the champagne, remember this important fact:
If you don’t handle your Section 199A planning correctly, your 199A deduction amount could be Zero. Nada. Zilch.
Why could this happen? Because your type of business, wages paid, and depreciable property are extremely relevant when you’re making your 199A calculation. And if you’re not following the letter of the law, you can face the reduction and/or elimination of your Section 199A tax deduction!
Want to stay on the safe side?
Read my new article titled Tax Tips: 2019 Last-Minute Section 199A Strategies That Reduce Taxes, Too.
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Take the pain out of
manually computing your Section 199A benefits.
to use the Tax Reduction Letter’s
FREE online Section 199A calculator
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Is your deduction less than 20%of your qualified business income (QBI)?
If yes, consider using one or more
of these four strategies.
Strategy #1: Harvest your capital losses. Capital gains add to your taxable income. I’m talking about the income that determines your eligibility for the Section 199A tax deduction, sets the upper limit (ceiling) on the amount of your deduction, and establishes when you need wages and/or property to obtain your maximum deduction. If capital gains are hurting your Section 199A deduction, you have time to act before the end of the year. You’ll get full details when you read the full article.
Strategy #2: Make your charitable contributions promptly. Since the Section 199A deduction uses taxable income for its thresholds, you can use itemized deductions to reduce and/or eliminate threshold problems and increase your Section 199A deduction. All will be explained when you read the full article.
Strategy #3: Make your retirement contributions. Any retirement contributions you make, directly reduces your taxable income — and you still keep the money inside the retirement account. Plus, it grows free of taxes until you take it out of the account. You’ll get the whole story when you read the full article.
Strategy #4: Buy business assets before the end of the year. Thanks to 100% bonus depreciation and Section 179 expensing, you can write off the entire cost of most assets you buy and place in service before December 31, 2019. This can boost your Section 199A deduction in two ways. We’ll tell you what they are when you read the full article.
to use the Tax Reduction Letter’s
FREE online Section 199A calculator