Article Date:
January 2018


Word Count:
1270

 

 

Tax Reform: Will Section 199A Phase In or Phase Out Your 20 Percent Deduction?


New tax code Section 199A creates a totally uncomplicated 20 percent tax deduction for you on your qualified business income if you operate a proprietorship, partnership, or S corporation and you1

 

·

are married and file a joint tax return with $315,000 or less in taxable income, or

·

are single and file your tax return with $157,500 or less of taxable income.

 

Example. You operate a proprietorship, file as a single taxpayer with $135,000 of taxable income, and have qualified business income of $120,000. Your new 20 percent tax deduction is $24,000 ($120,000 x 20 percent).

 

Once your taxable income exceeds the threshold amounts above, you arrive in one of the four possible categories below:

 

1.

Phase-in range for a non-specified service trade or business

2.

Phaseout range for a specified service trade or business

3.

Above the phase-in range for an in-favor non-specified service trade or business (for a straightforward ... Log in to view full article.

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