Article Date:
November 2018


Word Count:
747

 

 

Q&A: Statutory Insurance Agent Wins the 199A Tax Deduction


Facts

 

I have a client who sells life insurance, annuities, and mutual funds. He is paid on a commission basis.

 

He files two Schedule C’s each year. First, he files a Schedule C for his statutory W-2 income. Second, he files a Schedule C for his 1099 income, which he earns based on his security license sales.

 

On his statutory W-2 income, he pays FICA and Medicare taxes on his gross income. He deducts his business expenses on Schedule C against that gross income.

 

On his 1099 income, he pays the self-employment tax on his net income, after he deducts his business expenses on his Schedule C.

 

My client is married, and his income for purposes of the Section 199A tax deduction will look like this:

 

·

$140,000 in net Schedule C income from his W-2 statutory employee business

·

$130,000 in net Schedule C income from his 1099 annuity and mutual fund sales business

·

$300,000 in 1040 taxable income (the client has no capital gains)

 

Question

 

Will my client qualify for the Section 199A deduction on his W-2 statutory net income? How about on his net income from his 1099 commissions? ... Log in to view full article.

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