As part of the Tax Cuts & Job Act, passed on December 22, 2017, a new provision with significant planning opportunities was added to the tax law. At its simplest level, the Qualified Business Income (QBI) deduction allows individuals a §199A deduction of up to 20% against income from passthrough businesses (partnerships, S corporations, and sole proprietorships) for tax years between 2018 and 2025. The deduction can have significant benefits, potentially decreasing the effective tax rate on business income from 37% to 29.6% for those in the top bracket.Read More
Tax Warrior Chronicles
Last week, in our first blog post on the highlights of the 2012 American Taxpayer Relief Act (the Act), we promised to keep you constantly updated on the many complex pieces of the legislation. Our first update focused on the impact on individual filers. Today, we will look at the highlights for business entities. There’s a lot of ground to cover so for ease of digestion, we’ll point out the most familiar provisions. Updates and additional information will follow, as promised, on a regular basis.