here’s a lot of confusion and buzz around thenew 20% deductionfor small business owners. Who does it apply to? How does it work? When do you take it? There are many variables andconditional statementswithin this new law. Before we get too deep into it, let’s start by understanding how this new deduction applies to the most common business entity: Schedule C – Sole Proprietor.
Of the 26 million business in the United States,over 10 million are sole proprietorsfiling Schedule C. The amount of deduction you receive depends on what type of business you have, your business profits, and your taxable income. Let’s look at some examples to understand how this works.