SMEED CPA, Inc | 201 Sand Creek Road, Suite F | Brentwood, CA 94513 | Phone: 925-634-2344


       

 

 

Michael Uadiale, CPA, ACA, CGMA

SMEED CPA, Inc.

 

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This Month's Feature Articles

 

- Year-End Tax Planning for Individuals
 

- Year-End Tax Planning for Businesses
 

- Tax Benefits of Health Savings Accounts
 

- Making Tax Smart Loans to Family and Friends


- Section 199A: Qualified Business Income Deduction

 

Tax Tips

 

- Business Expense Deductions for Meals, Entertainment
 

- Understanding the Gift Tax
 

- The Health Care Law and Hiring Seasonal Workers
 

- Deferred Tax on Gains from Forced Sales of Livestock
 

- IRS Relief for Taxpayers Affected by Hurricanes

 


 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 

   

Section 199A: Qualified Business Income Deduction


 

Thanks to tax reform legislation passed in December 2017, eligible taxpayers may now deduct up to 20 percent of certain business income from qualified domestic businesses, as well as certain dividends.

Eligible taxpayers can claim the deduction for the first time on the 2018 federal income tax return they file in 2019.

Note: Although the final regulations have not yet been published in the Federal Register, taxpayers who wish to become familiar with the rules may review the proposed regulations issued by visiting the IRS website or calling the office.

The Qualified Business Income Deduction (QBID) often referred to as the 20 percent deduction for pass-through entities, is also known as the Section 199A deduction as it is named after Section 199A of the Internal Revenue Code.

Here are six key facts about the qualified business income deduction:

1. The deduction applies to qualified business income from a qualified business (i.e. pass-through entities) such as:

> a sole proprietorship
> S-corporation
> Partnership
> LLC treated as a sole proprietorship or partnership for tax purposes
> Non-corporate taxpayers such as trusts and estates
> REITs
> Publicly traded partnerships

2. Qualified business income is the net amount of qualified items of income, gain, deduction, and loss connected to a qualified U.S. trade or business. Only items included in taxable income are counted. Qualified business income does not include income from performing services as an employee. Capital gains and losses, shareholders wages, certain dividends, and interest income are excluded as well.

3. The deduction is available to eligible taxpayers, whether they itemize their deductions on Schedule A or take the standard deduction.

The deduction can be taken in addition to the standard or itemized deductions and is subject to limitations based on the type of trade or business, the taxpayer's taxable income, the amount of W-2 wages paid with respect to the qualified trade or business, and the unadjusted basis of qualified property held by the trade or business.

4. The deduction is generally equal to the lesser of these two amounts:

> Twenty percent of qualified business income plus 20 percent of qualified real estate investment trust dividends and qualified publicly traded partnership income.

> Twenty percent of taxable income computed before the qualified business income deduction minus net capital gains.

5. For taxpayers with taxable income computed before the qualified business income deduction that exceeds $315,000 for a married couple filing a joint return, or $157,500 for all other taxpayers, the deduction may be subject to additional limitations or exceptions.

These are based on the type of trade or business (see below), the taxpayer's taxable income, the amount of W-2 wages paid by the qualified trade or business, and the unadjusted basis immediately after acquisition of qualified property held by the trade or business.

6. Income earned through a C corporation is not eligible for the deduction.

7. Qualified Trade or Business. A qualified trade or business is any trade or business except one involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, investing and investment management, trading, dealing in certain assets or any trade or business where the principal asset is the reputation or skill of one or more of its employees. This exclusion only applies, however, if a taxpayer's taxable income exceeds $315,000 for a married couple filing a joint return, or $157,500 for all other taxpayers.

While relatively straightforward for most businesses, those with more complicated tax structures or multiple businesses or trades, consulting a tax professional is advised. As always, don't hesitate to call if you have any questions..

QUESTIONS About Levies and Extensions?
 

If you have any questions about Section 199A or other business deductions, don't hesitate to contact the office and speak to a tax professional you can trust. Call the office at 925-634-2344.
 

 


 

SMEED CPA Adds Financial Services To Help Clients With Investments & Insurance Needs

So often we here at SMEED CPA are asked about financial issues that impact our clients investments and their portfolios. 

We always offered our opinion and suggestions but in order to help our clients actually execute the changes we suggest, SMEED has created a Financial Services division.

 

SMEED Financial Services, Inc. will be able to work with both individual and business clients on their investment portfolios and manage assets on their behalf.

 

SMEED Financial will include Michael Uadiale, ACA, CPA, CGMA with over 18 years of financial sales and advising experience with affluent investors.

Watch your inbox and mail boxes for more specific information on services SMEED Financial Services, Inc will make available to you.

 


 

Help Us Be Found on Yelp & Google!

 

Also as we expand our business, we find more and more people are using YELP and Google to look for us by searching Brentwood accountant or Brentwood CPA.

 

When they do this we want to be FOUND on GOOGLE.  One way you can help us is to give us an ONLINE REVIEW on our Google Maps/Places listing --->

or check us out at our YELP local listing below.

 

Just click here to go to our Google Listing for SMEED CPA and click on the YELP link to go there.  Scroll down to the Review area.

 

On either site it may say:  Been here? Rate and review

You will click on the Rate and review link and then log in, then give us a review!

 

You can choose between 1 and 5 STARS and write in what you think about the tax or accounting work we have done for you.

 

It's that simple.  Thank you in advance for your help and cooperation!

 


 

As always you can call our offices if you have any questions about these or any other accounting related issues, at
925-634-2344. 

 

Regards, Michael Uadiale, CPA, ACA, CGMA

Managing Partner, SMEED CPA, Inc.

 
 

 

SMEED CPA, Inc | 201 Sand Creek Road, Suite F | Brentwood, CA 94513
The Next Frontier CPA Firm | www.SmeedCPA.com | info@smeedcpa.com
Phone: 925-634-2344 | Fax: 925-634-2346