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Section 199A Actual Tax Returns Comparison

Article ID: 405
Last updated: 24 Nov, 2018
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By Jason Watson ()
Posted November 23, 2018

The computation can be maddening as we’ve demonstrated in the previous pages. So… we created fictitious tax returns for Fred Flintstone operating an S corporation (he bought Slate Rock and Gravel from Mr. Slate). You can see side by side the differences between 2017 and 2018, using the new tax brackets, the new standard deduction and the Qualified Business Income Deduction (QBID) along with Section 199A.

Our $25,000-a-year expensive tax software (UltraTax aka UltraPain) does a wonderful job showing the worksheet computations of the Section 199A deduction, line by line.

Here is a table for reference-

Filing Status

TP Income

SP Income

Biz Inc

SSTB

199A Deduction

single

30,000

70,000

14,000

single

60,000

140,000

28,000

single

60,000

140,000

Yes

10,920

married

60,000

140,000

28,000

married

60,000

140,000

Yes

28,000

married

60,000

150,000

140,000

28,000

married

60,000

150,000

140,000

Yes

24,920

married

40,000

150,000

160,000

30,680

married

40,000

150,000

160,000

Yes

27,305

SSTB refers to specified service trade or business. The following link shows copies of the 2017 tax returns plus the 2018 tax projection worksheets (TPW as we call it) for our buddy Fred-

www.wcgurl.com/8313

Caution: Our software is using a strict interpretation of the tax code. This is where the accountant has to be the accountant, and prepare the tax return.

Taxpayer's Comprehensive Guide to LLCs and S Corps : 2019 Edition
This KB article is an excerpt from our book which is available in paperback from Amazon, as an eBook for Kindle and as a PDF from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles, click on the fancy buttons below or visit our webpage which provides more information at-

$24.95 $17.95 $12.95

www.watsoncpagroup.com/book

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Section 199A Recap       Chap 9 - Reasonable Shareholder Salary