About Course
Section 199A Deduction for Qualified Business Income
General Information
Course Description
The Section 199A Deduction for Qualified Business Income course explains the federal tax rules for identifying, calculating, and reporting the Qualified Business Income (QBI) deduction.
The course covers the framework of IRC §199A, the general 20% deduction formula, taxable income limitations, and the role of pass-through entities in reporting information to their owners.
Participants will learn the definition of a qualified trade or business, the classification of Specified Service Trades or Businesses (SSTBs), the de minimis rule, and the rental real estate safe harbor under Revenue Procedure 2019-38.
The program also examines which items are included in or excluded from QBI, the components of qualified REIT dividends and qualified PTP income, and the treatment of losses and carryforwards.
Practical application includes taxable income thresholds, phase-in ranges, W-2 wage and UBIA limitations, aggregation of multiple businesses, and the proper use of Form 8995 and Form 8995-A.
Worked examples and exercises guide participants through a systematic methodology—from classifying the business to calculating the deduction and reporting it on Form 1040 or Form 1041.
Course Objective
Provide participants with the knowledge and practical skills needed to determine whether an activity qualifies under IRC §199A, accurately calculate the QBI deduction, apply the SSTB, W-2 wage, UBIA, and taxable income limitations, and properly complete the required IRS forms and disclosures.
Learning Objectives
- Determine whether an activity qualifies as a qualified trade or business under IRC §199A.
- Correctly classify an activity as an SSTB or non-SSTB and apply the de minimis rule.
- Evaluate the rental real estate safe harbor under Revenue Procedure 2019-38.
- Calculate the QBI component and the qualified REIT/PTP component.
- Apply taxable income thresholds, phase-in ranges, and the W-2 wage and UBIA limitations.
- Determine when aggregation of multiple trades or businesses is permitted.
- Select and complete Form 8995 or Form 8995-A and the applicable schedules.
Industry Highlights
- The Tax Cuts and Jobs Act reduced the maximum corporate tax rate to 21% and introduced the IRC §199A deduction for eligible non-corporate businesses.
- Approximately 95% of U.S. businesses operate outside the traditional C corporation tax regime.
- The deduction may equal up to 20% of Qualified Business Income (QBI), plus 20% of qualified REIT dividends and qualified PTP income, subject to the overall taxable income limitation.
Who Should Take This Course
- Tax return preparers working with Schedule C, Schedule E, Schedule F, or Schedule K-1.
- Enrolled Agents (EAs), CPAs, and Annual Filing Season Program participants seeking continuing education in Federal Tax Law.
- Professionals preparing or reviewing tax returns for sole proprietorships, partnerships, and S corporations.
- Tax professionals responsible for reviewing QBI, W-2 wages, UBIA, and SSTB disclosures.
- Tax preparers with a basic understanding of Form 1040 and pass-through taxation.
Course Content – 5 Modules
| # | Title | Description |
|---|---|---|
| 01 | Fundamentals of the Section 199A Deduction | Statutory background, general 20% deduction formula, taxable income thresholds, and pass-through entities. |
| 02 | Qualified Trade or Business, SSTBs, and Rental Real Estate | Definitions, SSTB rules, the de minimis rule, and the rental real estate safe harbor. |
| 03 | QBI and REIT/PTP Components | Included and excluded items, losses, carryforwards, and special deduction components. |
| 04 | Calculation, Phase-In, W-2 Wages, UBIA, and Aggregation | Application of taxable income limitations, phase-ins, and aggregation rules. |
| 05 | Reporting and Compliance | Form 8995, Form 8995-A, disclosures, and documentation requirements. |
What You Will Achieve
- Apply a structured methodology to determine whether an activity generates eligible QBI.
- Differentiate SSTBs from non-SSTBs and evaluate mixed business activities.
- Calculate the deduction for taxpayers below, within, or above the applicable phase-in range.
- Correctly apply the W-2 wage and UBIA limitations.
- Incorporate qualified REIT dividends, qualified PTP income, and carryforward losses into the deduction.
- Determine when multiple businesses may be aggregated.
- Accurately report the deduction using Form 8995 or Form 8995-A.
Course Materials
- Detailed course program and syllabus.
- Internal Revenue Code §199A and Treasury Regulations §§1.199A-1 through 1.199A-6.
- Revenue Procedure 2019-38 covering the rental real estate safe harbor.
- Form 8995 and Form 8995-A, including Schedules A, B, C, and D.
- Schedule K-1 (Form 1065) and Schedule K-1 (Form 1120-S).
- Worked examples involving SSTBs, phase-in calculations, W-2 wages, UBIA, and aggregation.
- Decision trees, worksheets, and practical exercises.
Assessment
| Component | Requirement |
|---|---|
| Format | Independent self-study program with sequential module-based reading. |
| Review Questions | Integrated self-assessment questions and learning activities. |
| Final Examination | Multiple-choice examination upon completion of all five modules. |
| Minimum Passing Score | 70% |
| Credit Awarded | 1 Hour of CE Federal Tax Law |
Frequently Asked Questions
Student Ratings & Reviews
