WASHINGTON, DC – In addition to concerns already voiced about potential changes in tax policy, now farmers, ranchers, and small businesses are joining an effort to protect the Section 199A exemptions.
According to the American Bankers Association (ABA), Section 199A provides a 20 percent deduction for qualified business income and was enacted as part of the 2017 tax reform law. They suggest that any move by lawmakers to overhaul or repeal the provision will lead to significantly higher taxes for small businesses, especially sole-proprietorships, family-run firms, and pass-through entities.
The recent tax plan outlined by the Biden administration did not include changes to the Section 199A deduction, but a proposal from Senate Finance Committee Chairman Ron Wyden would take aim at the deduction in hopes of raising tens of billions in new revenue.
Bloomberg reports that the still unintroduced legislation would phase out the deduction for individuals with more than $400,000 in annual business income, and completely eliminated for those making more than $500,000.
(SOURCE: All Ag News)