199A TCJA - The S Corporation Association

Treasury on 199A Guardrails

Remember this JCT chart from earlier this year? It garnered lots of attention and called into question how the 199A pass-through deduction was structured. If only 9 percent of all pass-through income was disqualified from getting the deduction, what was the point of having all those complicated rules?

We wondered about the estimate at the time, as it didn’t comport with our member’s experience. In our S-CORP survey this year, only half of our members expected to get the full deduction, while rest expected just a partial deduction or no deduction at all. …

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admin2021-08-16T14:01:00+00:00August 27, 2019|

Joe Biden’s S-Corp

What is it about Presidential candidates and S corporations? First John Edwards made the practice of abusing the S corporation structure infamous back in 2004. Then we learned Newt Gingrich did the same thing when he ran in 2012. And now Joe Biden. At some point, these candidates are going to realize that saving 3.8 percent on your taxes isn’t worth the political pain it will cost you. (Hat tip to Bernie Sanders and former President Obama.)

For those not up to speed, the former Vice President and his wife released their tax returns this week. Focusing on his 2017 return, …

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admin2021-08-16T14:01:51+00:00July 11, 2019|

Section 199A Deduction Needed to Provide Pass-Throughs Tax Parity with C Corporations

A new presentation on the Section 199A deduction from the Joint Committee on Taxation has gotten people’s attention, particularly this slide:

The slide prompted Senator Ron Wyden, the Ranking Member on the Senate Finance Committee, to observe, “These are not the struggling small business owners we were told this provision would benefit.”

The Ranking Member’s response is misdirected, however. The 199A deduction was not an effort to reduce taxes on small businesses, but rather an attempt to maintain tax parity for pass-through businesses of all sizes. Without 199A, Main Street …

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admin2021-08-16T14:01:56+00:00March 18, 2019|

199A Pass-Through Deduction Rules Finalized

Treasury issued the final rules on 199A earlier this month. You can read the rules and accompanying guidance here:

You can also read a terrific “how does it all work” review published in Forbes the other day. As the writer notes:

I believe in giving credit where credit is due, and …

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admin2021-08-16T14:02:03+00:00January 30, 2019|

Tax Reform Overview

From the corporate perspective, the early returns on the new tax bill are promising. The markets certainly like the lower corporate tax rate and dozens of public companies have announced tax-cut related investments, wage hikes, and bonuses. For the corporate world, the new law appears to be doing exactly what its authors hoped for.

But what about Main Street businesses? Will they benefit from the new law? There, the outlook is much more complicated. C corporations got a rate cut. Pass-through businesses got a 20-percent deduction. The deduction is helpful, but it is smaller than the rate cut and it raises …

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admin2021-08-16T14:02:07+00:00February 7, 2018|