IRS releases final rules on deductions for “pass-through” businesses
The IRS has released its final rules on a key tax break for businesses — the so-called “pass-through deduction.”
The background:
The new tax law cut taxes for corporations from 35 percent to 21 percent.
But that didn’t apply to certain kinds of businesses, like LLCs and S corporations. They’re called pass-throughs, and they pay taxes based on their owner’s personal income, not the corporate tax rate.
So Congress came up with a tax break for these kinds of businesses, too. They can deduct up to 20 percent of their income when they do their taxes.
Problem is, it’s not clear if certain kinds of businesses qualify.