Good news!
The IRS has finalized its regulations of Section 199A of the tax code. Which means you may be eligible for a tax deduction worth up to 20-percent of your qualified business income (QBI)!
With the issuance of this final version of the rules, Uncle Sam has provided a clear definition of your qualified business income so you can now file your tax return standing on solid ground.
NOTE: The C corporation doesn’t generate the deduction but proprietorships, partnerships, S corporations, and certain trusts, estates, and rental properties are eligible for this big deduction.
Don’t miss out on this real opportunity to slash your tax bill. Read my new article titled Tax Tips: IRS Issues Final Section 199A Regulations and Defines QBI.
How to put your qualified business income to work!
We’ll explain the big picture.
The tax code says that your QBI includes the net dollar amount of qualified items of income, gain, deduction, and loss with respect to any qualified trade or business of the taxpayer. But that’s just for starters. You’ll get the whole story when you read the full article.
The sole-proprietorship QBI.
The QBI for the sole proprietor begins with your net business profit as shown on your Schedule C. You then adjust that profit by following four steps. We’ll tell you what they are when you read the full article.
Rental property QBI.
If you own rental property as an individual or through a single-member LLC for which you did not elect corporate taxation, you report your rental activity on Schedule E of your Form 1040. All will be explained when you read the full article.
Partner’s QBI from the partnership.
A partner may obtain income from the partnership in two ways: (1) as a payout of profits and/or (2) a Section 707 payment (generally referred to as a guaranteed payment). The profits qualify as QBI and the partnership profits are adjusted for the same items as for the sole proprietorship. You’ll get all the details when you read the full article.
S corporation shareholder QBI.
The shareholder in an S corporation ends with QBI calculated in the same manner as the sole proprietor. For example, the shareholder reduces his or her QBI for the self-employed health insurance deduction.
And that’s just for starters!