More Tax Plan Winners!

More Tax Plan Winners!

As Real Estate Agents we are very excited about several aspects of the new Tax Plan, which we have previously blogged about. But there are other winners and not just Real Estate Agents personally, but anyone who owns a small business or independent contractors of all kinds.

Some buyers and sellers we work with really don’t understand how we as agents get paid. We are 100% commission and we incur a lot of business expenses in the process. One of the biggest winners in this new tax plan are people who own small businesses or independent contractors and it’s because the recent tax reform bill has a 20% business income deduction, which is also known as 199A.

Starting this year, 2018, pretty much any self-employed party or owner of a pass through business like a S Corporation, LLC or Partnerships with eligible income can take 20% off the top after their business expenses are deducted. In other works, for simple math purposes, if your gross income is $100,000 and you have $20,000 of expenses normally you wold be paying your income taxes off of the $80,000 that remains. In this new scenario if your net is $80,000 you get to take this new 20% tax deduction off the $80,000 so now you are only paying your income taxes off of $64,000. That is an amazing tax break for the middle class business owners and independent contractors and as real estate agents this is a much needed tax benefit!

There have been a lot of rumors floating around that this tax break only benefits the wealthiest American’s but that simply is not true. Starting with 2018, If you file as an individual you are able until your income reaches $157,500 to benefit from this write off. After that the tax write off phases out over the next $50,000 until you reach $207,000. If you are married and file a joint return, this taxable income limit is $315,000 with a $100,000 phasing out up to your combined income of $415,000.
There are some scenarios where you can be eligible for the deduction higher than this amount, but that would depend on a formula that evaluates paid and depreciable business property.

I’m not a tax professional, this is just what I have been reading from various articles that are out right now so if you do have any questions, please consult with a tax professional. Every tax return is slightly different and I’m sure there are going to be nuances to this plan that will vary slightly for each tax return, but this is a good general overview.

My specialty is real estate, so if you know of anyone who is looking to buy or sell a home, we would be honored to help them. That is our passion and nothing gives us greater pleasure than helping someone achieve their home ownership dreams!

#DreamHomes #HomeOwnership #NewTaxPlanBenefits #HeilbrunHomeTeam #BuyorSellHomes

Dawn Heilbrun, Owner
The Heilbrun Home Team
Dawnh@johnlscott.com
253-307-6438

John L. Scott – Pierce, King and Thurston Counties (and More)

Www.HeilbrunHomeTeam.com

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