Guidance on the New Section 199A Changes


          At the end of August, the Internal Revenue Service (IRS) released some new guidance on changes related to Qualified Business Income (QBI) as covered in Section 199A. When the Tax Cuts and Jobs Act (TCJA) took effect, QBI was a topic of interest for many businesses. If the amount was determined correctly, it would directly lead to tax savings for the business. The calculations for this deduction have now changed.

          All items related to a trade or business must be considered, including charitable contributions and unreimbursed partnership expenses. The new guidance indicates that QBI will be reduced by the amount of charitable donations made by the business. As a result of this and other changes, the Qualified Tax Professional handling the taxes for the affected businesses will need to make several manual adjustments to the Tax Return. Tax software has not been able to keep up with these changes. Now is the time to consult with a Tax Professional to see how you or your business should move forward.

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