Specified Service Trade or Business is defined as:
- Traditional service professions such as doctors, attorneys, accountants, actuaries, and consultants
- Performing artists who perform on stage or in a studio
- Paid athletes
- Anyone who works in the financial services or brokerage industry
- "Any trade or business where the principal asset is the reputation or skill" of the owner. Engineers and Architects are exempt from Specified Service Trade, but an engineer operating a business based on his or her reputation or skill is still a specified service trade.
A specified Service Traded or Business (SSTB) is not able to take advantage of QBI in the same way a taxpayer whose business income is NOT an SSTB can.
The basic Section 199A Qualified Business Income pass-through deduction is 20% of net qualified business income, which is huge. How much you actually get to take is limited by several factors. Listed below are some of the major items:
- The nature of the business
- The taxable household income for the business owner, not just business income
- The amount the business pays the employees
- How much in capital assets
- Loss carryovers
*Those are just the basics, the rules are actually very complex.
Business Automobiles
You can claim deductions for the business-related use of an auto using either the standard mileage rate method or the actual expense method. You should use the method that will yield the largest deduction.
Mileage Logs
IRS requires you to maintain business mileage logs in order to take deductions.
Hiring Your Children
If you have your own business, consider hiring your child to work after school or on vacations. The wages you pay your child for bona fide work are tax deductible.
Home Office Expenses
To qualify for a deduction related to an office in the home, you must have an area of your home used exclusively as your principal place of business. This includes a place of business where you meet or deal with patients, clients, or customers.
Rental
If you have done any improvements other than minor repairs to the properties or assets please bring invoices for those expenses, and invoices for purchases of any assets.
Profit-Sharing Plans
Unlike other plans, a profit-sharing plan is flexible. It can be designed so that the employer is not required to make an annual contribution.
