The year is almost halfway over and a swath of business owners still remain uncertain as to how they should plan their taxes for the remainder of 2018.
The Tax Cuts and Jobs Act provides a 20 percent deduction for qualified business income from pass-through entities, which include S corporations and limited liability companies.
"Pass-throughs" are known as such because income from these small business "pass through" to the owner on his or her own taxes, where they are subject to individual income tax rates.
Though the 20 percent tax break is attractive to entrepreneurs, many are still uncertain as to whether they qualify for it. They are anxious because the middle of 2018 is rapidly approaching and their tax planning for the year is still in question.
"Business owners don't want to overpay their taxes during the year, but if they assume they qualify for the deduction and then later find out they didn't, they may find themselves underpaid and subject to a penalty," said Tim Steffen, director of advanced planning at Baird.
Here are where some of the key gray areas remain for business owners when it comes to the Internal Revenue Service and taxes, and how they're dealing with them.