Any new info on passthrough deductions for corp?

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ChinchillaWhiplash
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Any new info on passthrough deductions for corp?

Post by ChinchillaWhiplash » Mon Jul 09, 2018 8:17 am

Was wondering if IRS has given any info on small business/s corp passthrough deductions for 2018 tax year yet? Is it going to be better, worse, or about the same as before? :confused

mhalley
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Joined: Tue Nov 20, 2007 6:02 am

Re: Any new info on passthrough deductions for corp?

Post by mhalley » Mon Jul 09, 2018 1:47 pm

I don't know if this is anything new, but wci had a post regarding it after the tax act passed. It has a cute little flow chart :happy
https://www.whitecoatinvestor.com/pass- ... deduction/
and he discusses it on his podcast here:
https://www.whitecoatinvestor.com/tax-c ... odcast-53/
and kitces discusses it here
https://www.kitces.com/blog/pass-throug ... bi-limits/
and here
https://www.kitces.com/blog/small-busin ... trategies/

Pete3
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Re: Any new info on passthrough deductions for corp?

Post by Pete3 » Mon Jul 09, 2018 2:20 pm

ChinchillaWhiplash wrote:
Mon Jul 09, 2018 8:17 am
Was wondering if IRS has given any info on small business/s corp passthrough deductions for 2018 tax year yet? Is it going to be better, worse, or about the same as before? :confused
IRS has posted draft 1040 forms so while you may not what your QBI is (I couldn't find a draft worksheet for calculating QBI yet), you at least can see where on the form it will be deducted which gives you some idea of how it will work

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gasdoc
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Re: Any new info on passthrough deductions for corp?

Post by gasdoc » Mon Jul 09, 2018 2:56 pm

Thank you OP for bringing this up again, and thank you mhalley for sharing the links. I have emailed my CPA, wondering what my goal should be in terms of salary to pay myself and what my ideal retirement account contributions should be. That is a great discussion (as usual) by WCI.

gasdoc

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gilgamesh
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Re: Any new info on passthrough deductions for corp?

Post by gilgamesh » Mon Jul 09, 2018 4:04 pm

There are lots of ambiguities that has not been clarified. For instance, for MFJ with taxable income of less than $315k, even for non-qualified service industries the 20% 199A deduction still applies. However the clarification needed is in how sole-Prop LLC and S-corp are treated. As it stands now, S-corp "reasonable wages" are exempted from the 20% deduction, where as an Sole-prop LLC will get the 20% deduction for the entire taxable income. When reasonable wages is above the SS threshold, LLC could be a better option now...that's what I am waiting for

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FiveK
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Re: Any new info on passthrough deductions for corp?

Post by FiveK » Tue Jul 10, 2018 10:54 am

QBI Pass-through deduction in the case study spreadsheet mentions the addition of these calculations to that tool a couple of weeks ago. It also mentions that much remains unclear for certain situations.

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