When lawmakers recently passed the “Tax Cuts & Jobs Act of 2017,” they created a new tax deduction. It’s found in new tax code Section 199A, also known as the “Qualified Business Income Deduction.” Will it be good for you? Sure. If you’re not earning a lot. But if you’re a high earner, and operate a “specified service trade or business, “ your 20% deduction (under … [Read more...]
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Do You Need to Switch to an S Corporation Now to Realize the New 20% Deduction?
Because of tax reform, I’ve got three important questions for you: Do you currently file your taxes as… A Schedule C taxpayer because you receive 1099s? A Single-member LLC? A proprietorship? If you do fall into one of these categories, you can qualify for a new tax deduction equal to 20% of your qualified business income under new tax code Section 199A but only … [Read more...]
Will Section 199A Phase In or Phase Out Your 20 Percent Deduction?
Are you running a “pass-through” business like a proprietorship, S corporation, or partnership? Is it an “in-favor” business? If you’re answering “yes,” you qualify for tax reform’s new 20% deduction on qualified business income. (This is true whether you’re above, below, or in the expanded wage and property phase-in range.) BUT… if your business is an IRS-defined … [Read more...]
S corporation health-insurance update
S corporation owners may remember that (for 2014, 2015, and 2016) the IRS allowed you to avoid the $100-per-day penalties on S corporation reimbursements for individually-purchased health insurance. But what about 2017 and 2018? What’s your health-insurance status now? The good news is that your 2017 and 2018 S corporation health-insurance treatment continues as before. And … [Read more...]
A deduction for making things (this could be for you!)
Hey. You may not think of yourself as making things but the tax code allows this deduction for making things you may not be thinking of. Why should you care? Because if Uncle Sam considers you to be making things you may qualify for a nice deduction… up to 9% of all income from qualifying activities. There’s no catch and no recapture associated with the deduction. It’s … [Read more...]