New TCJA tax break may benefit your small business pass-through

Description

Abstract: A small business that operates as a pass-through entity may benefit from significant tax savings under the Tax Cuts and Jobs Act (TCJA). This article details the qualified business income (QBI) deduction and explains its limits. It also points out that, as with any new legislation that is this massive, it will take time for all the consequences to be fully understood, and that the IRS will likely issue regulations and guidance, such as reporting requirements and the allocation of items and wages. A sidebar offers an example that illustrates how to calculate the QBI deduction.