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In 2018, I will file taxes with taxable income between $157,500 and $207,500 single if I receive Qualified Business Income. Does it matter if this income is from an SSTB or not?

Date of Posting : June 22, 2020

Yes, it does matter. Your taxable income is more than the threshold amount; your section 199A deduction following the SSTB will be limited. Since you are in the phase-in range, you will be allowed for some section 199A deduction following an SSTB. Additionally, your taxable income above the threshold amount, the section 199A deduction in comparison to your trade or business, including an SSTB, may be constrained to an amount of W-2 wages paid by the trade or business and the UBIA of qualified property owned by the trade or business. The phase-in range is $315,000 to $415,000 for joint filers and $157,500 to $207,500 for other statuses. You can get more information in this context from Section 1.199A-1 of the proposed regulation.