Is my trade or business a “Specified Service Trade or Business” and is my taxable income more than the amount that permits me to have a full 20% Section 199A deduction?
Health care, legal, accounting, professional entertainment, athletes and certain other professionals and professional business owners are not able to deduct dividend and profit distributions if their income exceeds the now CPI modified limits of $160,700 in 2019 for a single person, or $321,400 in 2019 for a married couple filing jointly. The deduction is reduced on a sliding scale so that there is complete loss when a single person has taxable income exceeding $210,700 or a married couple filing jointly has income exceeding $421,400, or a sliding scale for income in-between.
This is a complicated area of tax law. It is strongly recommended that a tax lawyer be consulted who is familiar with these rules.