Tax Cuts & Jobs Act of 2018 - Pass-Through Deduction
Does Section 199A (Pass-Through Deduction) of the Tax Cuts and Jobs Act Benefit You?
The Tax Cuts and Jobs Act was signed into law on December 22, 2017 and contains a brand new provision: Section 199A or better known as the Pass-Through Deduction.
If you are a ....
- Sole Proprietorship
- "S" Corporation
- "C" Corporation
- Owner of Income Property
You may be eligible to deduct up to 20% of the income earned by the business or income property. The deduction reduces taxable income, but not your AGI (akdusted gross income) nor your self-employment tax. The Pass-Through Deduction begins to phase out for individuals at $157,500 and for MFJ (Married Filing Joint) returns at $315,000. The deduction will not apply to "specified service businesses" in the fields of health, law, consulting, athletics, financial and brokerage services where the principal asset is the reputation or skill of one or more employees or owners. The 282 page Section 199A tax code has several other guidelines and nuances that will impact how much of the 20% deduction you will be able to capitalize on. Let EG Tax assist you in filing your return to capitalize on the new tax code.