Section 199A is a 20 percent tax deduction for certain pass through entities. But once your taxable income is greater than the threshold amount, your deduction becomes more complicated. Under the rules that apply to this new Section 199A tax deduction, the tax code creates two types of businesses:
If you own a specified service trade or business, you suffer a zero Section 199A tax deduction on that businesses income when you have 1040 taxable income. As your, Section 199A reduces the tax deduction available to your out-of-favor specified service trade or business. This brings us to the question: What if your taxable income is above the limit, but your pass-through business has one part that’s out of favor and another part that’s in favor? You will like what the rules have done for you if you are in this situation. The new regulations make it clear that it is possible for you to benefit from other rules. If you offer various services and products in your business you may be able to prove with your financial books that your products qualify for Section 199A deduction. Spencer Accounting Group can help. Book your Business Consultation today!
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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. AuthorKeana 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. |