Effective for the 2018 tax year and ending Jan. 1, 2026, a new income tax deduction known as the “Qualified Net Business Income Deduction” is available to owners of certain pass-through businesses—such as partnerships, limited liability companies taxed as a partnership or sole proprietorship, S corporations and sole proprietorships.
In general, the deduction equals 20 percent of the company’s qualified net business income reportable by the owner and is calculated on the owner’s tax return. The calculation is then subject to several modifications and limitations.
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