Consider this a personal invitation to use our freeSection 199A Calculator But be sure to use it the correct way! Your 199A deduction requires W-2 wages and/or property (when your taxable income is greater than $415,000 married, filing jointly, or $207,500, filing as single or head of household.) If you earn above these amounts and do not formally elect aggregation of … [Read more...]
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Good News: Most Rentals Likely Qualify as Section 199A Businesses
As you probably know by now (and definitely know if you’re a regular reader of The Tax Reduction Letter), tax reform added tax code Section 199A. This new section created a new 20-percent tax deduction possibility for you if your rental property has profits and can qualify as a trade or business. Which means that if your rental property satisfies the above two conditions, … [Read more...]
What Can I Do If My K-1 Omits 199A Information?
Your tax reform’s 199A deduction doesn’t arrive on a silver platter compliments of the IRS. No. You have to calculate the deduction yourself, and to do so you need to receive complete and accurate K-1 information. But what happens if the pass-through entity doesn’t provide the complete, necessary information you require? (And by the way, this happens far more often than … [Read more...]
TCJA Planning: Terminating Your S Corporation Election
The Tax Cuts and Jobs Act (TCJA) may get you thinking about whether it makes sense to change your form of business entity. Maybe you’re considering turning your S corporation into a C corporation, partnership, or sole proprietorship. If you’re currently running a C corporation, you’ll have to terminate it and elect to switch to another form of business entity. How do … [Read more...]
IRS saves many vehicles from the TCJA bonus depreciation debacle
Do you own a tax-law-defined luxury automobile, crossover vehicle, pickup truck, or sport utility vehicle? If you do, this issue of the Tax Reduction Letter makes “must” reading. Why? Because the Tax Cuts and Jobs Act lets you deduct 100-percent of the cost of qualifying assets. It makes one major exception. I’m talking about the $8,000 bonus depreciation cap that … [Read more...]