Insights
Analysis
The Section 199A Deduction in 2021: Planning While the Pass-Through Window Is Still Open
With only a few years remaining before the scheduled sunset of Section 199A, 2021 is a good time for pass-through owners to review whether they are capturing the deduction efficiently.
What owners often miss
The deduction is not just about taxable income level. Compensation design, activity aggregation, W-2 wages, and qualified property can all affect the outcome.
Planning themes
- review S corporation compensation levels
- revisit aggregation elections and grouping logic
- evaluate whether ownership structure still supports the intended deduction
Bottom line
The most effective Section 199A work is proactive. Owners who wait until filing season often reduce the number of levers still available.
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