The Tax Cuts and Jobs Act restricts the losses that owners of pass-through entities (including sole proprietors) can currently deduct. For tax years beginning in 2018 through 2025, an “excess business loss” can’t be deducted in the current year. This is the excess of your aggregate business deductions for the tax year over the sum of 1) your aggregate business income and gains for the tax year and 2) $250,000 ($500,000 if you’re a married joint-filer). The excess business loss is carried over to the next tax year. Additional rules apply. Contact us for details.
The TCJA changes some rules for deducting pass-through business losses
- Payable-on-Death Accounts: Beneficial Tools if Used Correctly
- Is Your Business Closing? Here Are Your Final Tax Responsibilities.
- 4 Ways Corporate Business Owners Can Help Ensure Compensation is “Reasonable”.
- Tax Records: What Can You Toss and What Should You Keep?
- Designing for Efficiency: Engineers and Architects Benefit from Increased 179D Deduction on Government Buildings
