The Department of Treasury issued its final regulations on the new 20 percent deduction on qualified business income for owners of pass-through entities (199A) on Jan. 18. Application of these rules is very specific to individual fact patterns and we are continuing to review the details.
PartnersFinancial and AALU are very pleased that the regulations favorably treat commission-based life insurance sales income, and may provide meaningful tax savings related to the deduction for business owners or independent contractors principally engaged in this activity.
Because the application of the rules depends on facts and circumstances, AALU will be starting a Washington Report Newswire Series called The 199A Deduction to help provide its members with a deep exploration of how the new rules apply to various business models within the AALU membership.
This result was achieved through the efforts of AALU’s Government Affairs team and AALU’s continued tradition of effective advocacy for our industry should be celebrated by the entire profession. We are also grateful that experts at the Department embraced the rationale provided by AALU and its members by allowing commission-based life insurance sales activity to qualify for the deduction. See the original AALU 199A Comment Letter from October 2018.
Outcomes like this do not happen without meaningful effort or the support of our entire industry — but these efforts are worth it, given the nobleness of the profession we belong to. These are exactly the kind of results AALU is committed to delivering with their new strategic plan and new mission.
AALU’s initial analysis on the final rules, with specific examples to consider relative to your practice can be found in the Jan. 30 WRNewswire.
As those opportunities arise, we’ll let you know all about them. In the meantime, if you have any questions, please don’t hesitate to contact us.