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:

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

Phaseout range for a specified service trade or business

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