Financial advisors and retirement planners want a piece of this tax break

Entrepreneurs, regardless of the industry they are in, may take the full 20 percent deduction on qualified business income if they have taxable income that’s under $157,500 if single or $315,000 if married.

Once you exceed that threshold, limitations on who can take the break will apply.

For instance, “specified service trades or businesses,” which include doctors, lawyers and other specialists, can’t take the deduction at all if their taxable income exceeds $207,500 if single or $415,000 if married.

The rules are a little different for firms that don’t fall into this catgegory.

Those entrepreneurs receive a reduced deduction if their taxable income exceeds the $157,500/$315,000 threshold but is still below the $207,500/$415,000 threshold. The break they get is generally limited to 50 percent of wages they pay to employees, but owners can still collect a partial deduction if the business didn’t pay wages.

If your company is not a “specified service trade or business” and your taxable income is over the $207,500/$415,000 threshold, your deduction is generally limited based on wages you pay to your workers. You will get nothing if you are self-employed with no paid employees and exceed that limit.

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