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I am self employed. How do I take advantage of the 20% pass-through deduction in 2018? Do I need to set up an LLC? Can I still use Turbotax self employed software?

Does an LLC qualify for the 20% deduction?  Is there a maximum income limit for a professional to get this deduction (dentist)?  If there is a max. income limit, is the income gross income of net income after expenses and deductions?  Can I use Turbotax online self employed version or another version to file my taxes after I set up LLC?

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I am self employed. How do I take advantage of the 20% pass-through deduction in 2018? Do I need to set up an LLC? Can I still use Turbotax self employed software?

That is for 2018 returns you file in 2019.  And we don't know any details about the new tax code yet.  Nothing has changed for 2017 returns now.

I am self employed. How do I take advantage of the 20% pass-through deduction in 2018? Do I need to set up an LLC? Can I still use Turbotax self employed software?

The activity/setup must be appropriate for the new tax law, starting now.

I am self employed. How do I take advantage of the 20% pass-through deduction in 2018? Do I need to set up an LLC? Can I still use Turbotax self employed software?

You don't need anything special like a LLC.  Any business (besides a C-corporation) potentially qualifies for it.

You will qualify for it if (1) the "taxable income" on your tax return (Line 43 of Form 1040) and (2) your business profit is under $315,000 (Married Filing Jointly) or $157,500 (Single).  After that, the deduction starts getting phased out over the next $100,000/$50,000.

Although most businesses can still keep the 20% reduction if the income is above those amounts and they have enough W-2 wages or 'qualified property', several categories do not qualify for that provision.  Unfortunately for you, the "health" field is one of those unqualified businesses.  But again, if your income is below those dollar amounts, you will qualify for that deduction.

webdebnyc
New Member

I am self employed. How do I take advantage of the 20% pass-through deduction in 2018? Do I need to set up an LLC? Can I still use Turbotax self employed software?

So is it something that is applied automatically?  Or do I need to request it specifically?

I am self employed. How do I take advantage of the 20% pass-through deduction in 2018? Do I need to set up an LLC? Can I still use Turbotax self employed software?

It should be applied automatically. But that doesn't start until your 2018 tax returns (filed early in 2019).
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