What is 199-A election?
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What is 199-A election?

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The Section 199A deduction, also known as the Qualified Business Income Deduction, is a part of the Tax Cuts and Jobs Act of 2017. It allows sole proprietors, partnerships, and S corporations to deduct up to 20% of their qualified business income. However, the deduction is subject to various rules and limitations.

The term "199A election" typically refers to the decision made by taxpayers to claim this deduction. It's important to note that the calculation of the deduction can be complex, involving multiple steps and depending on factors such as the taxpayer's taxable income, the nature of the business, and whether the business pays wages or has property. Therefore, it's often recommended to consult with a tax professional when considering this election.
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