The focus of this presentation is how owners of eligible businesses can take full advantage of the new 20 percent Qualified Business Income (QBI) deduction. This new section of the code, 199A, was created under what is known as the Tax Cuts and Jobs Act (TCJA) passed on December 15, 2017 and applies to taxpayers for the 2018 year. This new 20 percent deduction is unprecedented and since many construction firms operate under some form of pass-through structure this deduction will benefit many in the industry. However, this new deduction is highly complicated and taxpayers will need to know how to navigate through the various phase outs and limitations known as ?safeguards? that Congress laden this new code section with.
1. Understand which type of businesses and what types of income qualify for the deduction
2. Understand the various limitations and phase outs that could limit the deduction
3. Learn what strategies are available that can be used to potentially maximize the deduction