Will you save money with the new business income deduction?
REALTORS® have a new tax saving opportunity coming their way.
This is the first tax year that REALTORS® can take advantage of the 20 percent business income deduction. Congress passed that provision last year as part of its big tax reform bill.
How it works
The qualified business income deduction, also called the pass-through business deduction, applies to your net business income, which is your commissions plus other qualified business income minus your expenses.
First, if you file as a single taxpayer, the deduction starts to phase out when your net business income hits $157,500. For joint filers, it starts to phase out after your joint net business income reaches $315,000. There are other limitations, too, including what the IRS will count as “qualified business income” in addition to your commissions.
How can I learn more?
Ask your accountant about the new Section 199A business income deduction. You can also view the video below about tax changes specific to real estate professionals and visit NAR’s website for a comprehensive look at what REALTORS® need to know about the new tax law.