IR-2018-162: IRS issues proposed regulations on new 20 percent deduction for passthrough businesses

Bookmark and Share

IRS.gov Banner
IRS Newswire August 8, 2018

News Essentials

What's Hot

News Releases

IRS - The Basics

IRS Guidance

Media Contacts

Facts & Figures

Around The Nation

e-News Subscriptions


The Newsroom Topics

Multimedia Center

Noticias en Español

Radio PSAs

Tax Scams

The Tax Gap

Fact Sheets

IRS Tax Tips

Armed Forces

Latest News Home


IRS Resources

Compliance & Enforcement

Contact My Local Office

Filing Options

Forms & Instructions

Frequently Asked Questions

News

Taxpayer Advocate

Where to File

IRS Social Media


Issue Number:    IR-2018-162

Inside This Issue


IRS issues proposed regulations on new 20 percent deduction for passthrough businesses

WASHINGTON — The Internal Revenue Service issued proposed regulations today for a new provision allowing many owners of sole proprietorships, partnerships, trusts and S corporations to deduct 20 percent of their qualified business income.

The new deduction -- referred to as the Section 199A deduction or the deduction for qualified business income -- was created by the Tax Cuts and Jobs Act. The deduction is available for tax years beginning after Dec. 31, 2017. Eligible taxpayers can claim it for the first time on the 2018 federal income tax return they file next year.

The deduction is generally available to eligible taxpayers whose 2018 taxable incomes fall below $315,000 for joint returns and $157,500 for other taxpayers. It's generally equal to the lesser of 20 percent of their qualified business income plus 20 percent of their qualified real estate investment trust dividends and qualified publicly traded partnership income or 20 percent of taxable income minus net capital gains.

Deductions for taxpayers above the $157,500/$315,000 taxable income thresholds may be limited. Those limitations are fully described in the proposed regulations.

Qualified business income includes domestic income from a trade or business. Employee wages, capital gain, interest and dividend income are excluded.

In addition, Notice 2018-64, also issued today, provides methods for calculating Form W-2 wages for purposes of the limitations on this deduction. More information may be found at www.IRS.gov.

Taxpayers may rely on the rules in these proposed regulations until final regulations are published in the Federal Register.

Written or electronic comments and requests for a public hearing on this proposed regulation must be received within 45 days of publication in the Federal Register.

Back to Top


 FaceBook Logo     Twitter Logo     LinkedIn Logo     YouTube Logo     IRS2go Logo

Thank you for subscribing to the IRS Newswire, an IRS e-mail service.

If you know someone who might want to subscribe to this mailing list, please forward this message to them so they can subscribe.

This message was distributed automatically from the mailing list IRS Newswire. Please Do Not Reply To This Message.


This email was sent to cetinkayaadem.news@blogger.com by: Internal Revenue Service (IRS) · Internal Revenue Service · 1111 Constitution Ave. N.W. · Washington DC 20535 GovDelivery logo