Is your business prepared to comply with the proposed new regulations on qualified business income?
By: Florida Chamber of Commerce
The Tax Cuts and Jobs Act (The Act), has brought with it many changes that impact South Florida business owners. One of the most significant changes created by the Act is the new Section 199A qualified business income (QBI) deduction.
Qualified business income includes domestic income from a trade or business and most real estate rental activities. Employee wages, capital gain, interest dividend income, and guaranteed payments to partners are excluded.
“The idea behind creating the QBI deduction was to reduce the taxable income of qualifying companies,” says Tony Argiz, chairman and CEO of MBAF.
Under the new Code Section 199A, there is a 20% deduction for QBI from a pass-through entity (partnerships and S corporations). The deduction also applies to sole proprietorships, trusts, estates, qualified cooperatives and real estate investment trusts (REITs).The QBI deduction can be applied for the first time in 2018, and is currently available to taxpayers whose 2018 taxable income falls below $315,000 for joint returns and $157,500 for other taxpayers.