Understanding and Applying the Section 199A Deduction in Light of the New Proposed IRS Guidance

On August 8, the IRS released 184 pages of regulations concerning the deduction for qualified business income under Section 199A of the Internal Revenue Code.  This deduction can offer major value for clients, but it is one of the most technically challenging provisions of The Tax Cuts and Jobs Act. Tax practitioners must know how Section 199A works in great detail so their clients can take advantage of the enormous opportunities this provision offers. These new IRS regulations provide much needed definitional, computational, and anti-avoidance guidance regarding the application of this deduction. This program will equip tax professionals to help clients implement Section 199A and maximize the 20% deduction, based on this just-issued guidance.

• Definitions that apply for purposes of the Section 199A deduction
• Operational rules for calculating the Section 199A deduction
• What is a specified service trade or business?
• Computation rules and examples for individuals whose taxable income exceeds the threshold amount
• Computation rules and examples for individuals whose taxable income does not exceed the threshold amount
• Calculating the deduction for taxpayers with taxable income within the phase-in-range
• Requirements for aggregation of separate trades or businesses
• Anti-abuse rules targeting use of trusts
• Special rules for pass-through entities, SE tax and net investment income tax
• Treatment of non-calendar year taxpayers
• Guidance on methods for calculating W-2 wages for purposes of Section 199A