The Tax Cuts and Jobs Act of 2017 (TCJA) introduced a new write-off for owners of pass-through entities that runs from 2018 through 2025. This deduction doesn’t require any cash outlay or special action to be eligible for it, but using it reduces the effective tax rate on business income. There is much confusion about this new deduction and some clarification will need IRS guidance. Here is what is clear so far, how it impacts attorneys, and what needs IRS and/or Congress to explain further.

Overview

Q: What is the new deduction?