Posts filed under the Citizens and Residents category.

Qualified Business Income Deduction for Rental Real Estate Owners-Safe harbor rule

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The 2017 Tax Cuts and Jobs Act (TCJA) created a new deduction known as the Qualified Business Income Deduction (QBID). It is also called the pass-through deduction or Section 199A deduction. The QBID allows small  business owners to deduct up to 20% of qualified business income from federal income tax. Rental property owners will interested in the safe harbor rule of the section 199A qualified business income deduction (QBID) for their rental property.

Taxpayers that have income (or loss) from rental property will not be eligible for the QBID when they hold the property for investment purposes.

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IRA Contributions and Deduction

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An individual Retirement account (IRA) provides certain tax advantages. Anyone who wants to save for retirement can set one up. Traditional IRA contributions are tax deductible for the year when you make the contribution, and withdrawals in retirement are taxed at ordinary income rate. Roth IRAs provide no tax break for contributions, but earnings and withdrawals are generally tax-free.

Limit for contributions to an Individual Retirement

You can contribute to a traditional IRA or Roth IRA or both.

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