As many of you now know, the new Section 199A offers a 20% deduction on your business that is deemed “qualified business income” or QBI. QBI is defined as the net amount of income and gain with respect to your trade or business. This income or gain can derive from your partnership, S corp, LLC, or schedule C sole proprietorship. What’s not included? 1. Capital gains and losses 2. Dividends 3. Interest income. The beauty of this deduction is that it is still available regardless of whether or not you choose to itemize your deductions or use the standard deduction. Are there any exceptions or limitations to this deduction? Almost always there are…
This deduction is only available fully to taxpayers whose taxable incomes fall below $315,000 for married filing jointly and $157,500. It phases out for taxable income above those amounts.
If you are anticipating your 2018 taxable income to be over the thresholds, please contact our office for more information and ways to prepare for this deduction before it is too late.