The Strongest "Influencer" is Tax Law

The Tax Cut and Jobs Act reduces taxes for most individuals and businesses, but it is not a tax simplification act. One of the most beneficial--and complex--provisions is the deduction for pass-through income, which applies to small-business owners like your humble blogger, but only if business affairs (these days the adjective is necessary 😀) are structured properly.

Explanation from the Wall Street Journal and Merrill Lynch 80-page Guide to the New World of Taxes.

Phase-outs, exceptions and gray areas in these limits make this new tax break highly complex, and tax advisers are struggling to figure it out.

For example, tax specialists say the owner of a chain of tanning salons should qualify for the new tax break, while someone who earns the same amount from a group of dermatology clinics won't.

A high-earning chef who owns her restaurant can expect to get the new deduction--unless she is a celebrity chef. In that case, she may not be able to qualify because the write-off isn't available to owners earning above the limit if the business's principal asset is the "reputation or skill" of its employees or owners.

I can see a bunch of wannabe celebrity chefs cutting out those expensive-to-make YouTube videos and focusing on running their restaurants instead.