The potential expiration of key provisions of the Tax Cuts and Jobs Act (TCJA) at the end of 2025 is a critical issue that requires careful attention and proactive planning, and Section 199A is no exception.
Lawmakers are currently carefully reviewing the impact of a potential wave of passthrough business conversions to C corporations if Section 199A expires as scheduled. This provision currently allows a 20% deduction for qualified business income from pass-throughs, effectively reducing the top marginal tax rate from 37% to 29.6% for these entities, and even lower for most small businesses.