By Jason Watson, CPA
Posted Wednesday, October 20, 2021
The computation can be maddening as we’ve demonstrated in the previous pages. So… we created fictitious tax returns for Fred Flintstone operating an S corporation (he bought Slate Rock and Gravel from Mr. Slate). You can see side by side the differences between 2017 and 2018, using the new tax brackets, the new standard deduction and the Qualified Business Income Deduction (QBID) along with Section 199A.
Our $25,000-a-year expensive tax software (UltraTax aka UltraPain) does a wonderful job showing the worksheet computations of the Section 199A deduction, line by line.
Here is a table for reference-
| Filing Status | TP Income | SP Income | Biz Inc | SSTB | 199A Deduction |
| single | 30,000 | 70,000 | 14,000 | ||
| single | 60,000 | 140,000 | 28,000 | ||
| single | 60,000 | 140,000 | Yes | 10,920 | |
| married | 60,000 | 140,000 | 28,000 | ||
| married | 60,000 | 140,000 | Yes | 28,000 | |
| married | 60,000 | 150,000 | 140,000 | 28,000 | |
| married | 60,000 | 150,000 | 140,000 | Yes | 24,920 |
| married | 40,000 | 150,000 | 160,000 | 30,680 | |
| married | 40,000 | 150,000 | 160,000 | Yes | 27,305 |
SSTB refers to specified service trade or business. The following link shows copies of the 2017 tax returns plus the 2018 tax projection worksheets (TPW as we call it) for our buddy Fred-
Caution: Our software is using a strict interpretation of the tax code. This is where the accountant has to be the accountant, and prepare the tax return.
Wanna Talk About Your Small Business?
Please use the form below to tell us a little about yourself, and what you have going on with your small business or 1099 contractor gig. WCG CPAs & Advisors are small business CPAs, tax professionals and consultants, and we look forward to talking to you!