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Tax Season 2019: Is it true there is a new 20% deduction for small business owners?
Is it true there is a new 20% deduction for small business owners?
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Accounting and Finance
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Yes! The new Section 199A QBI deduction can save you big this upcoming tax season. Check it out: https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-i...
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that is good information about the pass-through tax break that might help a lot of Square small businesses.
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Yea, also taxpayers can begin filing after January 28th!
https://www.irs.gov/newsroom/irs-confirms-tax-filing-season-to-begin-january-28
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Yup, here's a simple example of how it works:
Taxpayer with a Schedule C Filing Single
$100,000 Net Profit from Schedule C (this is your Qualified Business Income QBI)
Total Income $100,000
Single Standard Deduction <$12,000>
SE Tax Deduction <$7,650>
Taxable Income $80,350
Take the lesser of:
20% of QBI = (20%) * ($100,000) = $20,000 or
20% of Taxable Income = (20%) * ($80,350) = $16,070
Your QBI Deduction is $16,070
What does this do? It lowers your taxable income
New Taxable Income $80,350 - $16,070 = $64,280
You now pay tax on $64,280 instead of $80,350
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Thanks @latinotaxpro for sharing this info! @VanKalkerFarms, @latinotaxpro is one of our new community partners. Their org provides knowledge and community to those serving Latino taxpayers. 🙏
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