A New Deduction for Business Owners - Decoding the Tax Law
By Miles Pfeifer (guest post) I hope you had a happy Thanksgiving and are looking forward to the year-end holiday season. If you’re a business owner, Congress has already prepared an exciting ‘gift’ for you, as part of the Tax Cuts and Jobs Act of 2017: a shiny new business tax deduction. For those who qualify, properly taking advantage of these new tax rules may result in substantial tax savings. As part of the new tax laws, effective for income earned in 2018, the IRS has added a new Internal Revenue Code Section 199A, and come up with some ‘exciting’ new terms, most importantly “Qualified Business Income” (QBI) and “Specified Service Trade or Business” (SSTB). As is often the case with Congress and the IRS, the new laws come with instructions. Lots of instructions. The IRS has published its first set of guidance for these new rules, totaling only 184 pages. Don’t worry, more explanations are anticipated. For those brave enough to read on, ...