Last year, President Trump signed into law the widest-ranging tax reform legislation in decades. The Internal Revenue Service recently
issued a draft regulation on a key provision that allows for a 20 percent deduction on “qualified business income” for owners and shareholders of pass-through businesses.
Under the draft regulation, owners and shareholders of insurance agencies and brokerages can take the 20% tax deduction on qualified business income, no matter their taxable income levels, because the IRS does not consider insurance agents and brokers to be a “specified service trade or business.” Owners and shareholders of specified service trades and businesses cannot take advantage of the deduction if their taxable income is over a certain level.
The draft regulation is now open for a public comment period and will become final later this year. The Big “I” is currently reviewing the draft and will provide comments to the IRS, and further guidance to members as needed moving forward.
Every spring a delegation of SC agents visit the SC Congressional Delegation on Capitol Hill to discuss issues (like tax code reforms) important to independent agents and their clients.
Learn more about how the new federal tax law and regulations could impact your business during one of two free upcoming Big "I" webinars:
Thursday, Sept.13: 1:30-2:30 p.m. ET,
Wednesday, Oct. 3: 1:30-2:30 p.m. ET.
The webinar will provide a brief introduction to the tax law and its impact on C-corps, as well as changes to individual tax rates. It will also offer a comprehensive explanation of the new deduction for pass-through entities and the draft regulations that directly address how insurance agents and brokers can use the new deduction. Approximately two-thirds of Big “I" members are organized as pass-through entities, such as S-corps and LLCs.