New Section 199A deduction could provide additional business tax savings
Website design By BotEap.comThe Tax Cuts and Jobs Act of 2017, Regulation 11011, Section 199A, has provided a 20% tax deduction for conveyancing businesses. Eligible taxpayers include sole proprietors, S corporations, partnerships, publicly traded companies (PTPs), and real estate investment trusts (REITs). Although calculating the deduction could be a difficult challenge at the best of times, many taxpayers could end up adding to their bottom line.
Website design By BotEap.comSection 199 A, also known as the qualified business income deduction, has two main components as follows:
- Eligible taxpayers may be entitled to a deduction of up to 20 percent of the qualified business income (QBI) of a domestic business operated as a sole proprietor or through a partnership, S corporation, trust or estate. For taxpayers with taxable income in excess of $315,000 for a married couple filing jointly, or $157,500 for all other taxpayers, the deduction is subject to limitations such as the type of trade or business, the taxpayer’s taxable income, the amount of W-2 wages paid by the qualified trade or business and the unadjusted basis immediately after acquisition (UBIA) of qualified property by the trade or business. Income earned through a C corporation or from rendering services as an employee is not eligible for the deduction (www.irs.gov).
- Eligible taxpayers may also be entitled to a deduction of up to 20 percent of their combined dividends from qualified real estate investment trusts (REITs) and qualified income from publicly traded companies (PTPs). This component of the section 199A deduction is not limited by W-2 wages or the UBIA from qualified property (www.irs.gov).