Thomson Reuters Checkpoint Catalyst has released its analysis of the new IRC Section 199A qualified business income deduction, one of the most talked about provisions enacted by the Tax Cuts and Jobs Act (TCJA) of 2017.
IRC § 199A allows non-corporate owners of sole proprietorships, S corporations, and partnerships a deduction of up to 20% of their net qualified business income from each qualified pass-through business. In addition, IRC § 199A allows taxpayers to deduct up to 20% of real estate investment trust dividends and publicly traded partnership income. This is a significant tax benefit for many noncorporate business owners meant to keep pace with the reduction in the corporate tax rate to a flat 21%.
Checkpoint Catalyst Topic #302, Qualified Business Income from Partnerships, S Corporations, LLCs, and Sole Proprietorships (IRC § 199A), discusses the statutory construction of IRC § 199A, activities eligible for the deduction, the various limitations and prohibitions, and areas where additional guidance is needed before the provision can be properly implemented.
“New Section 199A of the Code is a significant change in the way income earned through pass-through businesses is taxed,” said Salim Sunderji, managing director, Checkpoint, with the Tax & Accounting business of Thomson Reuters. “This Topic provides tax advisers with step-by-step directions for computing a business owner’s tax liability and guidance on structuring taxpayer business arrangements to maximize federal income tax savings.”
The new Checkpoint Catalyst Topic is a valuable resource for tax advisers and other professionals with pass-through clients. It is a complete package meant to guide practitioners through the complex new rules. The Topic includes numerous examples as well as an interactive Qualified Business Income Deduction Worksheet. The worksheet is a powerful tool that allows practitioners to not only perform the intricate qualified business income calculation, but to model alternative scenarios and compare the outcomes in real time. It includes explanations of the terms and values required to make the calculation and cites relevant authorities.
Checkpoint Catalyst is a collection of multijurisdictional analyses of specific tax issues and business transactions from a practical, workflow perspective, covering implications at the federal, state and U.S. international levels. Content includes practical examples, commentary, and embedded workflow tools. Checkpoint Catalyst also provides expert guidance on a range of other related subjects, including:
- Taxation of S Corporation Income, Losses, Deductions and Credits
- Joint Ventures Taxed under Subchapter K
- Transactions Between Partners and Partnerships
- Entity Classification/Disregarded Entities
For more information about Checkpoint Catalyst, visit checkpointcatalyst.com.
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