Significant Planning Opportunities to Maximize Deduction
Effective for the 2018 tax year Section 199A allows a 20% deduction for “qualified business income.” This deduction applies to any business income earned outside a C corporation, so it will affect schedule C filers, and income earned in a partnership or an S corporation.
The mechanics of the deduction are not that difficult, but the deduction either phases out or may be limited if taxable income exceeds a threshold amount. For service businesses the deduction can be lost when income reaches the end of the phase-out range. For non-service businesses the deduction may be limited based on the W-2 wages paid from the business or a combination of W-2 wages and unadjusted basis of property used in the business.
It may not be clear whether a business is a service business. It may also be possible to plan to maximize the deduction when the taxpayer is otherwise in the phase-out range. This session will discuss those issues, and many others, to allow you to properly advise clients. Join Jim Hamill, CPA, Ph.D., for a look at how this deduction works and answers to your clients' questions about this money-saving opportunity for Schedule C filers and those in certain LLCs, S corps and partnerships.
Who Should AttendCPAs, EAs, tax preparers and other tax professionals with responsibility for advising clients with business income on their tax returns.
Instructional MethodGroup: Internet-based
NASBA Field of Study
Taxes (2 hours)
Program PrerequisitesBasic understanding of federal income taxation for individuals and pass-through entities.