Finalized Version of Pass-Through Tax Break Laws Complete
Recently, the finalized version of the tax codes governing tax breaks for pass-through business structures was released by the federal government. This portion of the new tax laws that were put into effect last year will govern the 2018 tax season and beyond, allowing business owners that were relying on a pass-through tax break to lower their tax burden access to the information they need to finish planning for and preparing their taxes for this year. If you use pass-through business structures, here are the details to help get you started.
Though the definition of pass-through business structures is fairly broad, it's also divided up by industry and category. It has been broadened to include a number of different categories that were previously excluded, such as mutual-fund holders who have money tied up in real estate. However, other large-salary businesses such as law firms are excluded.
Real estate is a common theme in the pass-through tax break, as is finance. These are some of the top industries that are benefiting from the tax breaks for pass-through business structures, providing significant savings for business owners in those sectors, including Airbnb rentals, provided that a minimum of amount of work is done annually.
Small businesses everywhere are benefiting very strongly from the pass-through tax break, with a wide range of pass-through business structures being accepted under the new tax laws. This allows small businesses everywhere to realize significant growth and reinvest in their businesses.
The estimated top figure for business owner savings for the pass-through tax break is 20%. The business owner could deduct 20% of the business profits that would typically be passed through to themselves as personal income, which would then be separately taxed on the owner's personal income taxes.
The finalization of the pass-through tax break allows companies to finish planning tax strategies for the end of last year and make plans for pass-through business structures well into the future. But what if you're not quite sure exactly how the new tax laws apply to your company? Fortunately, you don't have to go it alone. At AccountRely, we can connect you with a well-qualified accounting and tax law professional who can help you make the right decisions for your business. Please feel free to reach out today to get started.