Qualified Business Income Deduction

Qualified Business Income Deduction


QUALIFIED BUSINESS INCOME DEDUCTION
IF YOU REPORT TRADE OR BUSINESS INCOME ON SCHEDULES C, E OR F THERE’S A GOOD CHANCE
THAT YOU WILL QUALIFY FOR A NEW TAX BENEFIT WHEN YOU FILE YOUR 2018 FEDERAL TAX RETURN. IT’S CALLED THE QUALIFIED BUSINESS INCOME
DEDUCTION OR OFTEN REFERRED TO AS THE SECTION 199A DEDUCTION. THE NEW DEDUCTION CAN BE CLAIMED FOR UP TO
20 PERCENT OF YOUR QUALIFIED BUSINESS INCOME PLUS 20 PERCENT OF REAL ESTATE INVESTMENT
TRUST DIVIDENDS AND PUBLICLY TRADED PARTNERSHIP INCOME. NOW YOU’RE PROBABLY ASKING WHAT IS QUALIFIED
BUSINESS INCOME? WELL IF YOU ARE SELF-EMPLOYED OR AN INDEPENDENT
CONTRACTOR IN THE UNITED STATES AND REPORT YOUR BUSINESS INCOME ON A SCHEDULE C WHEN
YOU FILE YOUR TAXES… YOU LIKELY QUALIFY. THE SAME GOES IF YOU’RE AN OWNER IN A PARTNERSHIP
OR S CORPORATION. BUT IF YOUR BUSINESSES ARE LOSING MONEY YOU
WON’T GET IT. ALSO THERE ARE SOME IMPORTANT LIMITS THAT
APPLY TO HIGHER INCOME TAXPAYERS. FOR TAX YEAR 2018 THESE LIMITS APPLY TO TAXPAYERS
WHOSE TAXABLE INCOME EXCEEDS 315-THOUSAND DOLLARS FOR A MARRIED COUPLE FILING A JOINT
RETURN OR 157-THOUSAND-500-DOLLARS FOR OTHER FILERS. IF YOU’RE ELIGIBLE FOR THE NEW QUALIFIED
BUSINESS INCOME DEDUCTION BE SURE TO CLAIM IT ON LINE NINE OF YOUR FORM 1040. YOU CAN FIND DETAILS INCLUDING A USEFUL WORKSHEET
IN THE INSTRUCTIONS TO YOUR 1040 TAX RETURN. OR CHECK OUT OUR PUBLICATION ON BUSINESS EXPENSES
AT IRS.GOV/PUB535.

Leave a Reply

Your email address will not be published. Required fields are marked *