Monte Jackel Quoted in Tax Notes on Passthrough Deduction in Senate Tax Plan
Tax Notes has quoted Akin Gump senior counsel Monte Jackel in the article “Senate’s Deduction for Passthroughs Contrasts With House Plan,” which reports that tax legislation in the U.S. Senate differs with the proposal from the House of Representatives, in that the version in the upper chamber includes a deduction for passthrough businesses. That, according to the article, sets the stage for a necessary reconciliation of the two visions of reform.
The proposal released by the Senate Finance Committee includes a deduction of 17.4 percent of domestic qualified business income from a partnership, S corporation, or sole proprietorship. The proposal also includes a limitation on the deduction of 50 percent of the W-2 wages of the taxpayer, taking into account only those wages that are properly allocable to qualified business income.
Jackel noted that the proposal does not state whether the deduction is above the line or not. “I think it makes most sense that it is an above-the-line deduction because services as an employee are not qualifying income,” he said.