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AP Taxes
The tax law changes for 2018 included a 20% deduction for pass-through businesses. Pass-throughs include sole-proprietorships, partnerships, S corps, LLCs and LLPs. Basically, if you pay business taxes on your personal income tax forms, you are a pass-through. But, not all pass-throughs are qualified for this deduction. Problem is, what is a qualified pass-through business? The rules were not solidified until last month, in a 248 page, unreadable memorandum.
So, is AP income qualified for this deduction? Congress excluded a bunch of business types (health, law, accounting, brokerage, performing artists, athletics, and consulting). Congress also excluded any business where the principal asset is the reputation or skill of its owners, which would seem to have excluded APs. BUT, Treasury effectively overrode that exclusion. Treasury instead barred from taking the deduction only those businesses that earn endorsement, licensing, or appearance fees based on their owners’ reputation or skill. This will make it possible for many pass-through owners to claim the deduction (for example, professional gamblers), if Congress did not explicitly exclude their businesses. Or, so says the article linked below.
You’ll need to see a CPA to see if this applies to you.
https://www.taxpolicycenter.org/taxv...ugh-businesses
Last edited by Norm; 02-20-2019 at 07:58 AM.
"I don't think outside the box; I think of what I can do with the box." - Henri Matisse
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