The IRS issued proposed regulations today for a new provision allowing many owners of sole proprietorships, partnerships, trusts and S corporations to deduct 20 percent of their qualified business income.
The new deduction- -Section 199A deduction- – is available for tax years beginning after December 31, 2017. Eligible taxpayers can claim it for the first time on the 2018 federal income tax return they file next year.
Qualified business income includes domestic income from a trade or business. Excluding:
- Employee wages
- Capital gain
- Dividend income