Announcement

Collapse
No announcement yet.

new pass-through 20% reduction to income

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    new pass-through 20% reduction to income

    Will the new tax law's pass-through provision also affect a one person tax prep/investment broker schedule "C" filer as well ?

    If yes - would the 20% reduction come off gross, net or taxable schedule "C" income ? It is my understanding though, that all net (taxable) "C" income would remain taxable for SE purposes up to the wage base.

    #2
    Yes, but because it is a 'personal services' business, their "taxable income" (Line 43 of the current 1040) needs to be less than the phase-out threshold (it starts phasing out at $157,500/$315,000). If "taxable income" is over $207,500/$415,000, the credit is completely phased out (regardless of any W-2 wages or Qualified Property).

    The 20% reduction is based on the lower of (1) business profit, and (2) "taxable income" (Line 43 of the current 1040).

    Yes, the 20% deduction does not affect SE tax.

    Comment


      #3
      Yes, 20% of the net Sch C will be the deduction and correct there is no reduction or deduction in regards to the SE tax, the 15% SE tax is still on the full Sch C profit.

      Comment

      Working...
      X