Expand Deduction for Service Businesses, CPA Group Asks Congress

The American Institute of CPAs is asking the Congressional tax-writing committees to broaden a deduction used by partnerships and other pass-through entities.

The GOP’s 2017 tax law created a 20% qualified business income deduction for pass-through entities. But for taxpayers who own a specified service trade or business, such as accounting firms, the deduction was limited above a certain income threshold.

AICPA wants the difference for service businesses removed. But if it can’t be removed, the association recommends broadening the deduction to prevent owners of service businesses from “experiencing significant reductions” of the benefit, according to a Thursday letter ...