--- title: IRS Sets Final Regulations on 199A description: When Congress tackled tax reform last year, the new tax law permanently lowered the tax rate for corporations from 35% to 21%. To make sure that other business owners weren’t left behind, Congress provided a new deduction—Section 199A—for sole proprietors and owners of pass-through businesses. image: https://info.wealthcounsel.com/hubfs/199A.png --- [![WealthCounsel](https://info.wealthcounsel.com/hs-fs/hubfs/WealthCounsel%20Logo%202018/WC-Flag-Logo-Rev.png?width=800&height=93&name=WC-Flag-Logo-Rev.png "WealthCounsel")](https://www.wealthcounsel.com/) ![Blog-hero_columns](https://info.wealthcounsel.com/hs-fs/hubfs/Blog-hero_columns.png?width=2800&name=Blog-hero_columns.png "Blog-hero_columns") # [IRS Sets Final Regulations on 199A](https://info.wealthcounsel.com/blog/irs-sets-final-regulations-on-199a) Feb 15, 2019 1:33:36 PM ## ![199A](https://info.wealthcounsel.com/hs-fs/hubfs/199A.png?width=1656&name=199A.png) When Congress enacted tax reform in 2017, the new tax law permanently lowered the tax rate for corporations from 35% to 21%. To make sure that other business owners weren’t left behind, Congress provided a new deduction—Section 199A—for sole proprietors and owners of pass-through businesses. Section 199A offers eligible business owners a lower effective tax rate  by allowing for a deduction of up to 20% on qualified business income (QBI) for tax years 2018 - 2025. Due to a lack of initial guidance, there has been much difficulty and speculation regarding how this deduction works. Fortunately, in August 2018, the IRS quelled those uncertainties by releasing proposed regulations that have answered many burning questions. As of this January, those proposed regulations, with some clarifications and changes, have become final. The new regulations offer clarification regarding specified service trade or business (SSTB) guidelines, calculation of QBI, anti-abuse rules, and application of W2 wages and aggregate rules. Below are some highlights of the final regulations: To take advantage of the new regulations, it’s important to review your business owner clients’ situations and determine whether any changes need to be made to their choice of entity or operations. As these rules are complex and easy to mishandle, this may be one area in which “going it alone” is not likely to yield optimum results. Learn how a WealthCounsel membership can give you the information and support you need to continue to provide your estate and business planning clients with comprehensive legal strategy and advice. 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