Big “I” Commends Final Pass-Through Tax Regulation
IRS confirms that insurance agency owners and shareholders can fully utilize new tax deduction
The Trump Administration has finalized an IRS regulation making clear that owners and shareholders of insurance agencies and brokerages organized as pass-through entities can fully benefit from a new tax deduction.
Under the regulation, owners and shareholders of insurance agencies and brokerages can take up to a 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 engaged in 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.
“Today the IRS released a final regulation implementing a new section of the tax code to create a deduction for owners and shareholders of certain pass-through businesses, including insurance agencies and brokerages,” says Bob Rusbuldt, Big “I” president & CEO. “This regulation is a major and hard-fought win for Big ‘I’ members—the vast majority of which are organized as pass-through entities. Prior to the regulation being finalized there was uncertainty surrounding the application of the deduction to insurance businesses.”
IIABSC leadership treks to Washington D.C. annually to meet with SC Congressional delegation about issues important to independent agents and our clients. The new tax regulations was among the topics discussed.