As you all know, the Tax Cuts and Jobs Act, signed into law last December, provided qualified pass-through businesses with a 20% deduction, bringing the effective tax rate for those businesses down to 29.6%.
The law established conditions that would have to be met for a company to qualify for the deduction and it expressly excluded most service businesses.
Since enactment of the law, the Department of the Treasury has been writing the regulations necessary for implementation of the law and the 20% deduction. These regulations are meant to provide everything the pass-through companies need to comply with the TCJA. According to the Nonpartisan Tax Foundation Think Tank, “About 30 million U.S. businesses, including many small ‘mom and Pop’ businesses are organized as pass-through entities.”