In addition to providing a tax break for corporations, the Tax
Cuts and Jobs Act added new Internal Revenue Code Section 199A,
which creates a deduction for owners of pass-through entities.
While Section 199A definitely does not provide tax
simplification, it does provide significant tax savings for many
persons who operate their business in a partnership, limited
liability company or S corporation, as well as for investors in
such entities, REITS and publicly traded partnerships.
In general, a taxpayer is entitled to a deduction equal to 20
percent of the taxpayer's so-called "qualified business
income" from partnerships, limited liability companies, S
corporations and sole proprietorships, and 20 percent of qualified
REIT dividends, publicly traded partnership income and qualified
cooperative dividends. This deduction, however, is subject to a
variety of limitations and exclusions. First, except for the income
of architects and engineers, income from a service
