The Tax Cuts and Jobs Act dropped the top corporate rate to 21% and creates new Code Section 199A that provides for a 20% deduction for the non-wage portion of pass-through income. These changes set up seven important questions for advisors:

          1) What will a client’s pass-through deduction look like?

2) Is a particular client “better off” being a C Corporation or a pass-through entity?

3) Is a client "better off" staying as an employee or switching to independent contractor status?

4) Should Schedule C business owners switch to being an S corporation and pay themselves a salary in order to claim a 199A deduction?

5) Trusts and estates can qualify for the IRC 199A deduction, but how should an advisor compute the amounts apportioned to the trust/estate and the beneficiaries based on the rules under old IRC 199 and Treasury Regulation 1.199-5?

6) How will a contribution to a Qualified Retirement Plan reduce taxable income and how will that impact the IRC 199A deduction?

7) How do I input the information for up to 5 pass-thrus to calculate the 199A deduction?

8) How do I calculate the 199A deduction for farmers?

  • Quickly calculate the pass-through deduction;
  • Help advisors model the complex choice of entity question;
  • Help advisors with the EE vs IC conundrum;
  • Model whether Schedule C business owners should switch to being an S corporation and pay themselves a salary in order to claim a 199A deduction;
  • Compute the deduction apportioned to trusts and estate beneficiaries from which  the apportioned amounts calculated can be input into the 199A deduction calculator to compute the deduction;
  • It helps advisors model how making qualified retirement plan contributions can reduce a client’s taxable income and how that impacts the IRC 199A deduction.
  • It lets users input the information for up to 5 pass-thrus to calculate the 199A deduction
  • Allows advisors quickly calculate the 199A deduction for farmers, ie "specified agricultural and horticultural cooperatives"

The screenshots below provide an overview of what the inputs and outputs from both tools look like.  Twelve months of unlimited access is available for $159.00 

The tools are web based and require NO Download or Installation, and work in a standard web browser, on phones, tablets and computers.

CLICK HERE to listen to what Bob Keebler says about the tools

CLICK HERE to listen to Alan Gassman and Brandon Ketron describe the tools

Pass-Through Deduction Analyzer

To get started with the pass-through deduction analyzer, click on the Buy Now button below to pay/register. Then, first determine whether the pass-through entity is a "specified service trade or business" which is defined as any business that has income from the following 11 activities: 1) Health; 2) Law; 3) Accounting; 4) Actuarial science; 5) Performing arts; 6) Consulting; 7) Athletics; 8) Financial services; 9) Brokerage services; 10) Any trade or business where the principal asset is the reputation or skill of one or more employees; or 11) Any trade or business which involves the performance of services that consist of investing and investment management, trading, or dealing in securities, partnership interests, or commodities.

If the business is a "specified service trade or business" click this link and make the entries in the boxes:

If the business is not a "specified service trade or business" click this link and make the entries in the boxes:

C Corp vs. Pass-Through Analyzer

To get started with the C Corporation vs. pass-through entity analyzer, click the link below and make the entries in the boxes:

W-2 Employee vs. Independent Contractor Analysis

To get started with the W-2 Employee vs. Independent Contractor Analysis, click the link below and make the entries in the boxes:

 

Should a Schedule C Business Owner Switch to S Corporation Status and Pay Themselves a Salary To Claim a 199A Deduction?

To get started with this tool, click the link below and make the entries in the boxes:

 

199A Tool for Allocating the Deduction to Trust/Estate Beneficiaries?

To get started with this tool, click the link below and make the entries in the boxes:

 

Impact of Qualified Retirement Plan Deduction on IRC 199A Deduction

To get started with this tool, click the link below and make the entries in the boxes:


How to Input the Data for Up to 5 Pass-Thrus To Calculate the 199A Deduction

To get started with this tool, click the link below and make the entries in the boxes:



On March 23, 2018, President Trump signed into law the Consolidated Appropriations Act of 2018. The Act made amendments to IRC 199A to fix the so-called “grain glitch.” Under the revised IRC 199A(g), specified agricultural and horticultural cooperatives (e.g., farmers) may claim a deduction that is very similar to the “old” IRC 199 deduction, which was repealed under the TCJA. The deduction for qualified cooperative dividends under the original version of IRC 199A was also amended. ‘Specified agricultural or horticultural cooperatives’ are organizations to which part I of subchapter T applies and which are engaged (i) in the manufacturing, production, growth, or extraction in whole or significant part of any agricultural or horticultural product, or (ii) in the marketing of agricultural or horticultural products. Generally, these cooperatives can claim a deduction equal to 9% of their qualified production activities income, subject to limitations. For oil related qualified production activities income, there is generally a 3% reduction of the deduction.

Also, the cooperative’s patrons who receive qualified payments from the cooperative may claim a deduction equal to the portion of the deduction allowed to the cooperative which is allowed with respect to the portion of the qualified production activities income to which such payment is attributable and identified by the cooperative in a written notice mailed to the patron; the patron’s deduction cannot exceed the patron’s taxable income after taking into account any deduction under IRC 199A(a) (i.e., the 20% pass-thru deduction).


To get started with this tool, click the link below and make the entries in the boxes:

Questions? Click to read the FAQ

 

Enter Email Address Below then Click Buy Now Button Below







© 2018 Leimberg Information Services, Inc. ALL RIGHTS RESERVED No user may modify this software in any way, including but not limited to, decompiling, copying, sharing, disassembling, or otherwise reverse engineering the software.

These calculators do not represent tax, accounting, or legal advice. Individual taxpayers should rely on their own advisors. The authors and publisher expressly waive and disclaim any and all warranties concerning the calculators and their use or operation, whether express or implied, including without limitation, any warranty of merchantability or fitness for a particular purpose. The authors make no warranties as to the results to be obtained from the use of the calculators. You expressly agree that the use of the calculators is at your sole risk. The authors will not in any way be liable to you or any other person or entity for any damages, claims, liabilities or losses, regardless of cause, arising from the use of the calculators. The calculators are provided to you on an “as is” basis and without warranty of any kind.