MRPR Blog

The IRS released new proposed regulations for Qualified Opportunity Zones on April 17, 2019. The new regulations seek to clarify the vague statutory language of Internal Revenue Code Section 1400Z-1 and 1400Z-2, outlining the tax benefits of Qualified Opportunity Zones.

The damaging impact of identity theft can be devastating and long-lasting. When we send off our tax returns to the IRS we assume our information is safe. But did you know that the simple act of filing your tax return could put you at risk for identify theft?

Tax practitioners and industry leaders alike have been offering comments and posing questions to the IRS after the proposed regulations were released for the new Section 199A Qualified Business Income deduction. The IRS has worked diligently to analyze and clarify the new law, and issued final regulations on January 18, 2019.

We’ve written before about the Section 199A deduction of the Tax Cuts and Jobs Act (TCJA). The new law allows individuals and trusts to take a deduction of up to 20% of qualified business income, or QBI, from a domestic qualified trade or business.

However, there is a limitation placed on the deduction if your taxable income is over a certain threshold - $157,500 for a single filer, $315,000 for married filers – relating to qualified business income that is earned from a “specified service trade or business” (SSTB).

If you're confused already, here's what you need to know to understand how Section 199A impacts your taxable income.

The 2017 Tax Cuts and Jobs Act (TCJA) is one of the most consequential changes to U.S. tax law in decades. It features changes to individual rates, sweeping reforms to corporate taxation, and much more. One of the most important provisions of the new law is the new Section 199A deduction for Qualified Business Income (QBI). Any taxpayer receiving income from a domestic “trade or business” can potentially take a tax deduction for up to 20% of that income. Eligible taxpayers will be able to take the deduction for the first time on their 2018 personal income tax returns - Form 1040.

The Tax Cuts and Jobs Act (TCJA) has something for everyone. For example, corporate tax rates were cut from a top marginal rate of 35% to a flat rate of 21%.  And owners of most pass-through entities, such as S Corporations and partnerships, will realize a tax rate decrease of up to 10% as a result of the new Section 199A deduction. However, it's not all good news.