What’s New For Business Owners In The New Tax Law?
Here at Siegel Law, we know you have a lot of questions about how this new tax law may affect you and your business. Luckily we’re here to help navigate you through this and ensure you have a full understanding of what’s going on. We want to help you determine whether the new section 199A deduction will be available to you. With careful planning and you may be eligible for some financial benefits under this new law.
The new deduction will begin in 2018 and is available to qualified business and trade incomes. The QBI refers to any profits from your business other than investment account income. Some people who qualify would include sole proprietorships, sole owners of rental real estate, and S Corporation partnership owners.
The deduction itself can equal up to a maximum of 20% of the eligible business’ income. Depending on the size of a company, any income over $415,000 would use a different formula to calculate the deduction. Larger enterprises that qualify would instead receive a deduction that equals the lesser 20% of their QBI or 50% of the company payroll.
While this deduction could benefit many people, there are limits to its reach. People such as financial professionals, doctors, attorneys, and consultants would receive an extremely limited deduction if eligible. That eligibility would be determined by an individual’s taxable income. If they were to make more than $415,000, they would lose their eligibility for the deduction. Other professionals such as architects or engineers were purposefully excluded from this new law making them ineligible for the deduction.
We’re Here To Help
If you’re still unsure about whether you are eligible for this new deduction, don’t worry. Figuring out where you place in this new system is complicated, and you’ll need an attorney to assist you. Here at Siegel Law, we can help you determine your deductions and maximize your benefits, just give us a call at (561) 955-8515 or visit us here.