IRS: Life Insurance is NOT a Financial Service

[Rob Lion]

There is a new tax deduction of 20% for self-employed on business income.

Financial advisors will be capped based on earnings (due to a jobs classification) whereas insurance agents will not. (this isn't 100% accurate but it's the gist).

So we get to keep an extra 20% of our income?

 

[Tahoe Ray]

So we get to keep an extra 20% of our income?

No. It's a deduction.

So let's say that you're single and make 100k with no other deductions whatsoever (for the sake of simplicity). You'd owe around 18k in federal taxes.

This new tax law allows pass through entities (Sole prop, LLC, S Corps, etc.) to take 20% deduction on business earnings (and again, we're assuming all of the income is business earnings in this example).

So, now you only are making 80k for tax purposes. Federal tax would be around 13.5k.

You keep an extra 4500 bucks or so. Pretty good deal if you ask me.

 

[Rob Lion]

No. It's a deduction.

So let's say that you're single and make 100k with no other deductions whatsoever (for the sake of simplicity). You'd owe around 18k in federal taxes.

This new tax law allows pass through entities (Sole prop, LLC, S Corps, etc.) to take 20% deduction on business earnings (and again, we're assuming all of the income is business earnings in this example).

So, now you only are making 80k for tax purposes. Federal tax would be around 13.5k.

You keep an extra 4500 bucks or so. Pretty good deal if you ask me.

Okay, now i understand sorry this is my first year filling 1099 I've been collecting all my receipts though