Spencer Accounting Group, LLC - Tax Planning and Preparation Services - West Allis, Milwaukee, Brookfield, Waukesha, United States and Saudi Arabia
  • Home
  • COVID-19
  • Tax Checklist
  • Pricing
  • Let's Chat
  • Services
    • Business Consultation
    • Tax >
      • Tax Planning and Consulting
      • Tax Preparation
      • IRS Tax Audit and Notice Support
    • Tax Resolutions
  • Blog
  • About Us
  • Rush & Cancellation Policy
  • Home
  • COVID-19
  • Tax Checklist
  • Pricing
  • Let's Chat
  • Services
    • Business Consultation
    • Tax >
      • Tax Planning and Consulting
      • Tax Preparation
      • IRS Tax Audit and Notice Support
    • Tax Resolutions
  • Blog
  • About Us
  • Rush & Cancellation Policy

FREE Tax Tips and Updates

Browse our blog for helpful tax planning and preparation information.

2019 199A Tax Deduction

10/19/2019

0 Comments

 
If you operate your business as a pass-through entity, such as a proprietorship, partnership, or S corporation, the profits of that business can generate the Section 199A tax deduction.  Let's Tax Plan today.

No-Problem Businesses

You qualify for the Section 199A deduction—period, regardless of pass-through business type—when you have

• pass-through qualified business income (QBI), and
• 2019 Form 1040 taxable income equal to or less than $160,700 single (and head of household) or $321,400 married, filing jointly.

With Form 1040 taxable income equal to or less than the thresholds listed above, doctors, lawyers, accountants, financial planners, stockbrokers, manufacturers, retailers, consultants, and all other businesses with pass-through income qualify for the deduction.

There’s no out-of-favor specified service business problem with income below the thresholds. And the calculation is easy.

With taxable income equal to or less than the thresholds, you qualify for the Section 199A deduction. Your deduction will equal the lesser of:

• 20 percent of your Form 1040 taxable income less net capital gains and dividends, or
• 20 percent of your QBI.

Note that qualification for the deduction starts with your Form 1040 taxable income.

Example. You are married with joint taxable income of $320,000 and QBI of $350,000. Your Section 199A deduction is $64,000.

As you can see, no issues. If your taxable income is above the thresholds, you need to consider tax planning—now. Why now? Because some strategies require that you have time on your side.

For example, if you switch from a proprietorship to an S corporation to benefit from the W-2 wage strategy, your switch does not begin until you have the S corporation in place.

If you are looking at a retirement plan strategy, you want time to consider your options and get that tax-savings plan in place.
Schedule Your Strategy Session
0 Comments



Leave a Reply.

    We're Here to Help

    Get advice from our experienced network of financial managers. 
    ​

    Categories

    All
    Adjusted Gross Income Compared To Modified Adjusted Gross Income
    Affordable Care Act
    Business Credit
    Calendar Update
    Charitable Donations: Smart Giving
    Due Dates
    End Of The Month Savings Tips!
    Fun Facts
    Important Changes: Listen Up!
    IRA And Wisconsin 529 College Savings Plan
    IRA Roth Conversion
    IRS
    Phishing Scam Warning
    Six Steps For Making Identity Protection Part Of Your Routine
    Tax Reform

    Tax Plan Video

    Important Disclosures


    Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.

    ​
    To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
    ​
    These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

    GET STARTED

    Author

    Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion.  Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.

    Keana founded this website and decided and created this blog page to offer a space for those seeking knowledge to understand, however not to be confused with advice or planning strategies.

    RSS Feed

    Accounting Services
    Tax Preparation
    Picture
Contact us to Get Started:

Email:     Telephone:

Company
About Us
Career Opportunities
Document Upload
Privacy Policy

Picture
Picture
Picture
Copyright @2013-2020 ALL RIGHTS RESERVED.
Photo used under Creative Commons from verchmarco