Lee B

O K, I read the bill carefully and if the Qualified Business Income is under the Threshold Amount of MFS $ 157,500 or MFJ $ 315,000 then the limitation of 50 % of the W -2 Income is not applied. Therefore a SP with Qualified Income under the Threshold Amount would get a 20 % deduction. For S Corp there are special anti-abuse rules that would prevent an S Corp owner from taking this deduction if he took $ 0 wages.

I think you have the S Corp/PTS right. I haven't seen anything about how the SP will work

Just read a commentary on the website Tax Pro Today, that says the the bill specifically prohibits prepaying and deducting 2018 state and local income taxes, but it does not prohibit prepayment and deduction of 2018 property taxes. On the other hand, there is an article on the AICPA website that says, there is no authority supporting the prepayment and deduction of any of these taxes.

Judy, I read that section too and I agree. Plus I have seen tax experts posting the same point. I do have some clients that I will encourage to make their 4th quarter estimated payments prior to January 1st, plus other clients who pay their 2017 property taxes 1/3 in February and the last 1/3 in May, who I will encourage to pay as much as possible before January 1st. Myself, I am going to pay both my 2017 and 2018 charitable contributions this month.

Their are now news stories confirming this. Apparently this was a concession to get Senator Susan Collins vote. So we will be wrestling with the SRP for 2 more tax seasons.

Just finished recalculating my 2016 ta return under the new law. Despite my taxable income going up due the loss of my personal exemptions, the change in tax rates/brackets resulted in a $ 700 savings in my federal taxes. If I qualify for the 20 % pass thru deduction, that would save me another $ 2,000. Happy Holidays

Just been skimming thru the new tax bill. It appears that the effective date for the repeal of the Individual Mandate is not effective until tax years beginning after 12/31/18 ! Mind Blowing !

They went with senate version which allows the pass through deduction for service businesses, attorneys, accountants etc. up to MFS $ 157,500 and MFJ $ 315,000 before a phase out , limited by 50 % of W-2 Income. What I am curious about is does the deduction still apply, if your marginal tax rate is below 25 % ?

No the 15 % rate was was discarded, so small regular corporations will end up paying an additional $ 3,000 of tax every year on the first $ 50,000 of taxable income. Not very small business friendly !

I agree the cleanest way to handle this is for the S Corp to purchase the truck.

I would say that I get the "free" Kiplinger Newsletter 3 or 4 times a year.

It's not a done deal yet. The repeal is in the Senate bill but not in the House bill.

You might check out the online website " Tax Pro Today."

Clear your browser history or try a different browser.

Edsel, The problem with this strategy is that most clients are going to blame their preparer if this goes bad. Plus, it doesn't solve the problem.

Judy, I agree with the policy of banning political posts from this board, but I agree with Edsel, I think you pulled the trigger a bit too soon.

As a practical matter, the IRS does have 11,000 fewer employees and our congress keeps imposing additional mandates without any additional funding. Then everyone scapegoats the IRS for every little thing. It would be very difficult to be an IRS employee under these conditions Actually some knowledgeable observers are very concerned that the IRS may have an institutional collapse. I am afraid that this situation will get worse.

What exactly does this software do ?

Copied from the ATX Board: The program will be released later today then you should be able to download it. Sorry for the confusion. Marilyn BurttSr Business AnalystWolters Kluwer, TAA North America

Yes, it applies to 2014, 2015 & 2016.

Copy of today's post from ATX Kristin: "E-file will be shutdown the night of 11/17 (the day before) in order to allow for acknowledgements to be received"

The tax experts are already finding loopholes LOL: As the bill is currently written the owners of pass thru entities would be able to still deduct their state and local taxes on Schedule A, while no one else would.