Summer Tax Updates - Start Your Planning Now

Recently the IRS released "Notice 2018-64" regarding the new Qualified Business Income (QBI) 20% deduction. Now I won't go into great details regarding the notice, but it basically provides small businesses with a method for calculating W-2 wages for the purposes of determining if a small business qualifies for QBI. The notice outlines the regulations and specifies which business types qualify for the deduction. These regulations are proposed regulations (may be subject to change) and tax payers and professionals will need to rely on this guidance until final regulations are published.

The new QBI regulations will affect a great deal of small business owners in more ways than one. Some questions that small business owners need to address include:

• What trades or businesses qualify for the deduction
• How much W-2 income can I make to qualify for the deduction
• What happens if my income is over the deduction threshold
• Have I selected the correct business entity structure

These are just a few of the questions small business owners need to address regarding the QBI deduction. The dog days of summer are a great time for small businesses to address these questions. By taking a little time now to do a bit of tax planning, a small business owner can ensure that there are now surprises when tax time rolls around.

We are currently developing a presentation that will go into greater detail regarding the QBI deduction and what you need to do as a small business owner to protect your hard earned dollars.

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