I’m Billy Griffin. I am a Tax Partner here at Hancock Askew & Company. My main role is to advise individuals and businesses as far as their tax planning and tax preparation.
This year is a very big year for us. In December 2017, Congress passed the most sweeping changes in tax legislation in 30 years. There’s a lot going on in the tax arena and a lot that we’re talking to our clients about to help them get ready. It’s a very favorable tax law, it was meant to be favorable to taxpayers.
One of the things that we are making sure clients know about, especially if the own a business, is code section 199A. It’s projected to affect at least 10 million taxpayers, maybe more. 199A relates to business owners. If you’re a business owner, and you’re organized as a sole proprietor, an S-Corporation, a partnership, this provision relates to you. It also relates to estates and trusts and I should say it also relates to you if you have rental property. If you fall into one of those buckets, you need to know about section 199A.
So, what is it? Well, the law this year says that if you have less than $315,000 of taxable income married filing joint, and you’re a business owner and you have qualified business income, then you can take a 20% deduction off your business income. It’s a big benefit. Business owners that are in one of these types of businesses: S-Corp, partnership, sole proprietors with income less than $315,000 then it will definitely apply to you. If your income is over $315,000 it could still apply to you through different rules that you need to apply. It won’t relay to every business once you go over $315,000 married filing joint taxable income.