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 “specified service trade or business,” it is in the out-of-favor group. This means you only benefit when you’re in or below the phase-out range.

Want to learn how Section 199A rules affect you? Read my new article titled Tax Reform: Will Section 199A Phase In or Phase Out Your 20 Percent Deduction?

Three ways our fact-filled article can help you:

1. We’ll explain the whole phase-in, phase-out story. Under new Section 199A of the tax code, the favorable 20 percent of qualified business income deduction can be phased in or out depending on your taxable income. Sound complicated? It is, sort of, but we’ll explain things clearly when you read the full article.
2. You’ll learn about the phase-out benefits for “out-of-favor” businesses. If you’re a doctor, lawyer, accountant (or work in other specified professions), your benefits may be phased out and you’ll get nothing! What makes you suffer the “no benefit” rule? The fact that your taxable income is too high! You’ll get all the details when you read the full article.
3. We’ll tell you what tax-favored business owners need to know. If you have taxable income of less than a specified threshold dollar amount, you qualify for the 20% deduction. If you earn more than a certain dollar ceiling amount, you need wages and or depreciable property to benefit during the phase-in range and to avoid a zero deduction. You’ll get all the details when you read the full article.