Bloomberg Tax has released a Section 199A Deduction Calculator to help taxpayers determine the 20 percent deduction on qualified business income of pass-through entities, such as partnerships and S corporations, under the new tax law.

Subscribers to Bloomberg Tax’s research service now get access to the online calculator.

The Tax Cuts and Jobs Act that Congress passed last December added the 20 percent deduction for pass-through income under Section 199A of the tax code. However, it has proven to be a tricky calculation with many components, and tax experts have been asking for more guidance from the IRS. The Bloomberg Tax Calculator aims to help practitioners enter the various parts of each of the sources of pass-through income for a company to determine the deduction and gauge the impact of each variable by adjusting the different inputs.

Information buttons in each data field of the software explain the reasoning behind the various components, linking to supporting primary sources and analysis from Bloomberg Tax’s Tax Management Portfolios and other sources from the company. The goal is to help tax pros understand the main considerations and the impact of each part of the calculation for the new pass-through deduction.

“In the wake of the 2017 tax act, the challenge of determining whether taxpayers are better off incorporating or forming a pass-through entity became even more complicated—and our new 199A deduction calculator will help tax practitioners advise business owners of the best option for their personal situation,” said Bloomberg Tax vice president and general manager Lisa Fitzpatrick in a statement.

For more information, visit https://www.bna.com/tax/.

 President Trump speaks during a tax bill passage event with Republican congressional leaders.
President Donald Trump speaks during a tax bill passage event with Republican congressional members of the House and Senate. Zach Gibson/Bloomberg

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Michael Cohn

Michael Cohn

Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.