The new tax act creates a potential major opportunity for many business owners thanks to the Qualified Business Income (QBI) deduction.In simplest terms, the QBI deduction targets 20% of one’s “qualified business income” derived from a partnership, Subchapter S Corporation, or sole proprietorship, each of which may be considered to be a pass-through entity in the eyes of the Internal Revenue Service (IRS). To learn if you will qualify it’s important to understand the complexities of the new regulation. While the IRS has produced nearly 200 pages to clarify QBI deduction qualifications, we present the basics here.
The Takeaway: Until we experience a full tax season and precedents are established, expect a bit of uncertainty from the new tax code. While our office does not provide tax advice, we’d be pleased to refer you to a qualified accountant upon request.
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