IRS issues proposed regulations on new 20 percent deduction for passthrough businesses

Written by promotiondept

November 12, 2018

issues proposed regultions on new 20 percent deduction for pssthrough businesses

IR-2018-162, ug. 8, 2018

IR-2018-162, ug. 8, 2018

WSHINGTON — The Internl Revenue Service issued proposed regulations tody for new provision llowing mny owners of sole proprietorships, prtnerships, trusts nd S corportions to deduct 20 percent of their qulified business income.

WSHINGTON — The Internl Revenue Service issued proposed regulations tody for new provision llowing mny owners of sole proprietorships, prtnerships, trusts nd S corportions to deduct 20 percent of their qulified business income.

The new deduction — referred to s the Section 199 deduction or the deduction for qulified business income — ws eted by the Tx Cuts nd Jobs ct. The deduction is vilble for tx yers beginning fter Dec. 31, 2017. Eligible tyers cn clim it for the ft on the 2018 federl income tx return they file next yer.

The new deduction — referred to s the Section 199 deduction or the deduction for qulified business income — ws eted by the Tx Cuts nd Jobs ct. The deduction is vilble for tx yers beginning fter Dec. 31, 2017. Eligible tyers cn clim it for the ft on the 2018 federl income tx return they file next yer.

The deduction is generlly vilble to eligible tyers whose 2018 txble incomes fll below $315,000 for joint returns nd $157,500 for other tyers. It’s generlly equl to the lesser of 20 percent of their qulified business income plus 20 percent of their qulified rel estte int trust dividends nd qulified publicly trded prtnership income or 20 percent of txble income minus net cpitl gins.

The deduction is generlly vilble to eligible tyers whose 2018 txble incomes fll below $315,000 for joint returns nd $157,500 for other tyers. It’s generlly equl to the lesser of 20 percent of their qulified business income plus 20 percent of their qulified rel estte int trust dividends nd qulified publicly trded prtnership income or 20 percent of txble income minus net cpitl gins.

Deductions for tyers bove the $157,500/$315,000 txble income thresholds my be limited. Those limittions re fully desibed in the proposed regultions.

Deductions for tyers bove the $157,500/$315,000 txble income thresholds my be limited. Those limittions re fully desibed in the proposed regultions.

Qulified business income includes domestic income from trde or business. Employee wges, cpitl gin, interest nd dividend income re excluded.

Qulified business income includes domestic income from trde or business. Employee wges, cpitl gin, interest nd dividend income re excluded.

In ddition, Notice 2018-64, lso issued tody, s methods for clculting Form W-2 wges for purposes of the limittions on this deduction. More informtion in the form of FAQs on Section 199A cn be found on .gov.

In ddition, Notice 2018-64, lso issued tody, s methods for clculting Form W-2 wges for purposes of the limittions on this deduction. More informtion in the form of FAQs on Section 199A cn be found on .gov.

Tyers my rely on the rules in these proposed regultions until finl regultions re published in the Federl Register.

Tyers my rely on the rules in these proposed regultions until finl regultions re published in the Federl Register.

Written or eleonic comts nd requests for public hering on this proposed regultion must be received within 45 dys of publiction in the Federl Register.

Written or eleonic comts nd requests for public hering on this proposed regultion must be received within 45 dys of publiction in the Federl Register.


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