You may have heard of a Specified Service Trade or Business (SSTB). An SSTB is:

  • any trade or business involving the performance of services described in Code Sec. 1202(e)(3)(A) (e.g., health, law, accounting), other than engineering or architecture or which would be so described if the term “employee owners” were substituted for “employees” in that section; or

  • (ii) any trade or business which involves performance of services that consist of investing and investment management, trading, or dealing in securities described in Code Sec. 475(c)(2), partnership interests, or commodities described in Code Sec. 475(e)(2). (Code Sec. 199A(d)(2))

Proposed SSTB regulations on which taxpayers explain what is a specified service trade or business and a trade or business of an employee. Prop Reg § 1.199A-5.

  • Threshold exception to exclusion - For filings for 2018, if the taxable income of any taxpayer is less than $157,500 (or $315,000 in the case of a joint return), the exclusion for specified service trades or businesses does not apply, and the deduction is available to the taxpayer, for that year. For 2019, the threshold starts at $321,400 for married filing joint returns, $160,725 for married filing separate returns, and $160,700 for single and head of household returns.

If, for any tax year, the taxable income of any taxpayer is less than the sum of the beginning threshold amount plus $50,000 ($100,000 in the case of a joint return), a phaseout rule applies to specified service trades or businesses. (Code Sec. 199A(d)(3)(A)(i))

For more information about taxes implications for a Specified Service Trade or Business – an SSTB – go with a CPA firm that goes above and beyond, contact PIASCIK to set up a consultation. We’ll meet with you to show you all the benefits of being a PIASCIK client. (U.S.) (866) 501-4013, (International U.S.) +1 (804) 527-1815, (E-mail)