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I might be wrong but I think that tax rate is not 20%. I think the deduction is 20%. If I understand it correctly then what it means is that if you have earned
by nodejsbangalore 9y ago
I might be wrong but I think that tax rate is not 20%.
I think the deduction is 20%. If I understand it correctly then what it means is that if you have earned $100k then you are taxed only on $80k and 20% (20K in this case) is your deduction.
Can someone confirm/deny it.
- jermaustin1 9y ago90% confirm. If your company earned $100k, and paid you $50k, you can deduct 20% of the 100k capped at 20% of your ordinary income ($50k), for a total deduction of $10k.
- ttcbj 9y agoYes, it is a deduction of 20%.
- jermaustin1 9y agoCapped at 20% of your ordinary income.
- misiti3780 9y agobut not if you are a software consulting apparently: https://news.ycombinator.com/item?id=15973178 https://news.ycombinator.com/item?id=15973178
- spikels 9y agoand your taxable income exceeds $315,000 for married individuals filing jointly or $157,500 for individuals. The 20% deduction starts phasing out at those levels.