199A TCJA - The S Corporation Association

Main Street Tax Certainty Act

Good news for Main Street! Long time S-Corp champion Senator Steve Daines from Montana plans to introduce his “Main Street Tax Certainty Act” later today. Cosponsored by more than a dozen of his colleagues, the bill would prevent rate hikes on America’s individually and family-owned businesses by making permanent the Section 199A 20-percent deduction. This deduction was created by the Tax Cuts and Jobs Act but is scheduled to sunset at the end of 2025.

The introduction of this legislation was widely anticipated in the business community, with more than 140 trade associations representing millions of Main Street businesses, including NFIB, …

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admin2023-05-25T17:56:24+00:00May 18, 2023|

Grading the TCJA, Two Years Later

The American Enterprise Institute has a new“Trump Tax Reform Blog” series on its website. Over the next month, tax policy folks from both sides will weigh in on the reform and whether it’s working. You can read the current posts here. Our invitation to comment must have got lost in the mail, but no worries, it’s a brave new world and we can comment anyway. Here’s our report:

Has the TCJA helped American workers and businesses with additional economic growth? Such questions are impossible to answer with absolute certainty, since we will never know what the economy would have done …

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admin2021-08-16T14:00:03+00:00September 27, 2019|

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|