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Small Business Tax Q&A: May ’18

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in Small Business Tax

New tax break for going solo

Q. Does the new deduction for pass-through entities also apply to self-employed individuals? J.M.J., Mansfield, Ohio

A. Yes. This deduction is available to sole proprietors as well as individuals who own interests in pass-through entities like S corporations, partnerships and limited liability companies (LLCs). But the new deduction, which takes effect in 2018, is causing a great deal of confusion. Generally, you’re entitled to a maximum deduction of 20% of qualified business income (QBI), but it’s reduced if your income exceeds certain thresholds. It also depends on whether you’re in a personal service business (e.g., medicine or law). These taxpayers may get no deduction above the stated income levels.

Tip: The IRS is expected to issue more guidance in the near future.

A house sale divided still stands

Q. Can you still claim the home sale exclusion if you’re paid in a few installme...(register to read more)

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