Tax-Efficient Pass-Through Entities The Power of the LLC 20 Exclusion

Allows taxpayers to exclude up to 20 percent of their pass-through business income from federal income tax. Heavily skewed in favor of high-income people, the deduction effectively cuts the top tax rate on this pass-through income by 20 percent, to ... Pass-through taxation refers to businesses that do not pay taxes on the entity level. Instead, the income passes to the owners of the business who pays ... Even among partners with positive, non-passive partnership income (i.e. excluding portfolio and passive income), about 20 percent of distributed ... The legislation also allows a corresponding refundable income tax credit to certain PTE owners for any amount of income tax paid by a PTE having Virginia ... Allows qualified pass-through businesses a 20% deduction, with some limits, of business income from individual taxable income. • For example, a ... You say the new law “limits the Sec. 199A deduction to no more than 20% of the taxpayer's taxable income,” Assuming a person is smart about ... For those pass-through owners with taxable income of less than $315,000 for joint filers ($157,500 for single filers), the only restriction is ... The pass-through entity tax (PTE) allows partnerships and S Corporations to elect to be taxed at the entity level for state income tax purposes. If the entity ... 199A, passthrough entity owners cannot claim the qualified business income deduction of up to 20% of the income from businesses operated ...