What do You Need to Know About the New QSBS Tax Changes?

The new law, which goes into effect on January 1, 2019, allows business owners to take a 20% deduction on their qualified business income. There are some restrictions and requirements that business owners need to be aware of, so be sure to read up on the changes before you file your taxes next year. If you have any questions about the new QSBS tax changes, be sure to speak with your accountant or financial advisor.

What are the new QSBS tax changes and who is eligible for them? 

The new QSBS tax changes are a result of the Tax Cuts and Jobs Act, which was passed by Congress in December 2017. The changes are designed to help business owners by allowing them to take a deduction on their qualified business income. There are some restrictions and requirements that business owners need to be aware of, so be sure to read up on the changes before you file your taxes next year. The new QSBS tax changes allow business owners to take a 20% deduction on their qualified business income. 

The new Qualified Small Business Stock (QSBS) tax changes offer some great benefits to small business owners. If your company is eligible, you can now enjoy a reduced tax rate on the sale of your QSBS shares. To be eligible for the reduced tax rate, your company must meet the following criteria:

1. Your company must be a C corporation.
2. Your company must have been incorporated for less than five years.
3. Your company’s gross assets must be less than $50 million.

If your company meets all of the criteria, you can enjoy a 20% deduction on the sale of your QSBS shares. Eligible business owners include those who own sole proprietorships, partnerships, S corporations, and LLCs. There are some restrictions and requirements that business owners need to be aware of, so be sure to read up on the changes before you file your taxes next year.

When considering the new QSBS tax changes, there are a few things to keep in mind. First, the deduction is only available to business owners with qualified business income. This means that if your business doesn’t generate a profit, you won’t be eligible for the deduction. Secondly, the deduction is capped at 20% of your qualified business income. This means that if your business generates a large amount of income, you may not be able to deduct the entire amount. Finally, there are a few other restrictions and requirements that business owners need to be aware of before they can take advantage of the deduction.

The new QSBS changes can be a great way to reduce your tax liability next year. However, there are a few things to keep in mind before you can take advantage of the deduction.  Be sure to speak with your accountant or financial advisor to learn more about the new QSBS tax changes and how they may impact your business.