Qualified Business Income (QBI) Deduction (199A) - The Ins & Outs

Overview

The Tax Cuts and Jobs Act (TCJA) was a major overhaul of our tax system that lowered the income tax rates for individual and corporate taxpayers and introduced the new 20% qualified business income (QBI) deduction for sole proprietors and pass-through entities. The cornerstone of this course is the comprehensive discussion of the 20% QBI deduction final regulations under IRC §199A.   

**Please Note:  If you need credit reported to the IRS for this IRS approved program, please download the IRS CE request form on the Course Materials Tab and submit to kori.herrera@acpen.com

Prerequisites

Background in individual and business income tax law

Objectives

• Once participants have completed this session, they should be able to calculate and explain the QBI deduction to their clients, colleagues and employees.

Highlights

• Detailed coverage of calculating the combined qualified business income amount (i.e., QBI component and REIT/PTP component)
• Determine what trade or businesses under §162 are eligible for the QBI deduction (i.e., rentals and specified service trades or businesses (SSTB))
• Discuss how the 20% QBI deduction (i.e., QBI component) is subject to a wage/capital limitation and SSTB income is phased-out for taxpayers with taxable income above the inflation adjusted threshold amounts
• Walk through the simplified QBI Form 8995 (i.e., taxpayers below the TI threshold amounts) and detailed Form 8995-A and related schedules
• Determine what wages and unadjusted basis immediately after acquisition (UBIA) are for those subject to the wage and capital limitations
• Look at what the definition of QBI is and what items are effectively connected with that trade or business (i.e., self-employment tax, health insurance, retirement plans)
• Review the aggregation rules for the QBI computation and both the entity and individual level
• Walk through the reporting responsibilities of partnerships and S corporations to their owners on the Schedule K-1s
• Explain how the modifications to the net operating losses (NOLs) and §461(l) excess business loss limitations affect the QBI computation