If you own a small business, your San Antonio TX CPA can help you take advantage of a new tax deduction that allows some business owners to deduct up to 20% of income on their returns. The deduction went into effect for the 2018 tax year, meaning they were available for the first time on returns filed this year. The deduction is part of the Tax Cuts and Jobs Act.
Qualifications for the deduction vary among business categories, so it’s important to seek the advice of a CPA before filing. In general, the deduction can be taken for pass-through income from certain businesses and financial entities, including but not limited to sole proprietorships, S corporations, partnerships and real estate investment trusts (REITs).
Eligible taxpayers can take the deduction whether they itemize on their returns or take the standard deduction. Income limits apply. Single filers making less than $157,500 or joint filers making more than $315,000 may qualify for the deduction. Some filers with incomes above those limits may also qualify, depending in part on their industry and the amount of wages their business paid to W-2 employees. Special rules apply for owners of rental properties.
In order to avoid undue scrutiny when taking the deduction, business owners are advised to keep scrupulous records and receipts. It’s also important to avoid making noticeable changes to your business in order to get the deduction. In any case, be prepared to defend your deduction to the IRS. Take only what you are comfortable claiming and are confident you can defend. Work with your CPA to decide how to proceed.
At Gonzales Group, business accounting is our specialty. We help you plan and prepare your taxes throughout the year to keep your business on track. Our online portal allows you to upload access your information any time of the day or night, any day of the week.
To find out if you can take advantage of the 20% business tax deduction, call Gonzales Group today at 210-366-9430 and get tax help from an experienced San Antonio TX CPA firm.Tags: cpa firm in san antonio tx, CPA in San Antonio Tx
This post was written by Gonzales Group CPA