The Tax Break That Doctors and Plumbers Both Will Miss

Rules around key deduction for many small firms has high earners, experts puzzled; ‘As clear as mud’

The Wall Street Journal
By Ruth Simon

The owner of a successful chain of tanning salons should qualify for a new tax deduction, but someone who makes the same amount from a group of dermatology clinics won’t.

A high-earning architect can generally claim that same tax break, but the designer who collects a big fee for working on the building’s interior probably can’t. A chef who owns her restaurant can also expect to pay less, but that may not be true if she is a celebrity chef.

Tax experts and accountants are scratching their heads over these and other quirks in how the new federal tax law treats high-income owners of so-called pass-through businesses, which are firms that pay tax through individual, not corporate, returns.

Read the full article here.