Published on Consumer Reports, 2018
If you file Schedule C, for business income, there are new rules that apply to so-called “pass-through entities” that could be beneficial to you.
If your business is a sole proprietorship, partnership, limited liability corporation, or other eligible structure, you may be able to exclude 20 percent of your business income from taxation.
“This is going to be the major change for most businesspeople,” says Brian Kristiansen, a CPA and partner at Friedman, an accounting firm headquartered in New York.
But not every small business qualifies, Kristiansen says. “It depends, in part, on the type of business you have, and whether you receive ‘reasonable compensation.’”
Keep in mind, though, that the IRS has yet to put out detailed regulations on this issue.
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