Recently, the IRS released final regulations providing guidance on the Qualified Business Income Deduction, also known as the Section 199A deduction. This guidance was originally released as proposed regulations back in August, and after a few tweaks and adjustments, they were made final on January 18th of this year. While the proposed regulations were helpful, taxpayers could not legally rely on them. They let taxpayers know how the IRS viewed certain aspects of the tax law, but they could not move forward with their tax plans until the regulations were finalized. Now that they are, taxpayers and their accountants can fully understand how this deduction will impact their 2018 taxes, and they can solidify their tax plans for 2019 and beyond. To help clients, prospects and others, Wilson Lewis has provided a summary of key changes below.
The final regulations adopt most of the provisions in the proposed regulations, with a few differences.
In this same pronouncement, the IRS released a new set of proposed regulations that addresses three aspects of the 199A deduction that weren’t addressed in either the August 2018 proposed regulations or the January 2019 finalized regulations.
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These final Section 199A regulations have been highly anticipated. Unfortunately, even though these are finalized, taxpayers remain in a state of limbo. There are still many questions that remain unanswered, and it may take months for this second set of proposed regulations to be made final. Taxpayer may be forced to file their 2018 returns before these regulations are finalized. Luckily, your Wilson Lewis tax advisors can help. Even though these new proposed regulations are not yet final, much of the QBI Deduction has clear-cut rules to follow. If you have questions about the information about the final regulations or need assistance with tax planning, Wilson Lewis can help. For additional information call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.
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