By Washington, D.C., Staff
The Internal Revenue Service issued a regulation to provide guidance for pass-through business owners when taking a 20% deduction under Section 199a of the 2017 tax overhaul law.
The tax law change will benefit small business owners who pay taxes on their personal tax returns—partnerships, limited liability companies, and S corporations. Any taxpayers who earn less than $157,500, or $315,000 for a married couple, can deduct 20% of the income they receive via pass-through businesses from their overall taxable income. Taxpayers earning above those amounts must meet certain tests to take the full deduction, such as the amount of W-2 employee wages paid in the business.
For more information, read IRS Final Rule for 20% Section 199a Tax Deduction.
Questions? Contact Stuart Gosswein at stuartg@sema.org.