Eligible taxpayers may now deduct up to 20 percent of certain business income from domestic businesses operated as sole proprietorships or through partnerships, S corporations, trusts, and estates. The deduction may also be claimed on certain dividends. Eligible taxpayers can claim the deduction for the first time on the 2018 federal income tax return they file in 2019. This provision is the result of tax reform legislation passed in December 2017.
Here are some things business owners should know about this deduction:
REG-107892-18, Qualified Business Income Deduction
Notice 2018-64, Methods for Calculating W-2 Wages for Purposes of Section 199A
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