Is your business a “pass-through entity,”
howard? If so, this issue of Tax Tips
will be important to you.
WHAT’S A “PASS-THROUGH ENTITY?”
The term refers to Sole-Proprietorships
(which includes most small and home-based
businesses), plus most LLCs, Partnerships,
S-Corporations, trusts and estates.
If you haven’t already heard, the big “2018
Tax Cuts Act” added a new section to the
Tax Code, Section 199-A, which offers an
across-the-board 20% tax cut for most
taxpayers running “pass-through entities.”
That’s great news for most small-business-
owners. The only type of business this does
not apply to is a C-Corp., which got its own
tax cut in the Tax Act.
IT’S IMPACT ON YOU?
In most cases it means your business will pay
20% less tax this year (2018) than you would
have paid without the Tax Act changes.
Big tax cut, and easy to understand, right?
What’s not to love about that?
The IRS must think that is too easy, and “easy”
is not a word in the IRS glossary of terms.
So, they need to explain it to us. The draft
wording of that explanation is 284 pages long!
Can you believe it? Now, here’s the almost
laughable part – A statement is actually printed
on the draft notice, saying this 284-page draft
document has been found to be in accordance
with the Paperwork Reduction Act of 1995
[44 U.S.C. 3507(d)]
I’ll be wading through this monster in the next
few days and then I’ll send you a condensed
summary of the key points in it.
Creating Tax-Smart Small-Business Owners,
Ronald R. (‘Ron’) Mueller, MBA, Ph.D.
Author, Speaker and Small Biz Tax Educator