First I’d like to be clear. I do not think this tax bill is reform in any way. It’s a terrible law seriously impacting the most vulnerable people in our society at the advantage of those of us who need the least. I’m sharing this link for the benefit of the real estate licensee professional who provides a service and provides for their family on the income they earn.
We’ve heard the alarms of the National Association of Realtors® over the limitation of the property tax deduction. It’s clear the law is unfairly favorable to the smallest percent of Americans. We heard there was something in the law to give the small business owner an incentive to hire. What we had not heard was an explanation of what defines a pass-through business eligible for the 20 percent deduction. Thanks to the National Association of Realtors, and the Wisconsin Realtors Association, we now have clarification.
The 20 percent deduction is available to non-personal service businesses. A brokerage service is a personal service business, and a real estate firm is a brokerage. You would think we do not qualify for the tax deduction. No. We do. The NAR (yes, lobbyists) made a deal and an exception was granted for the real estate industry. (Firms and agents). With a limit on the amount of income eligible to the claim the deduction ($157,500 individual-$315,000 couples filing jointly), independent contractor real estate licensees are eligible for the deduction.
Check with your lawyer and accountant to verify the info is correct and what will be your best method of participating.
More information is available through the NAR web site link above.