SSTB

[barone3911]

Have a client who received a 1099-Misc for non employee compensation $20k. The client performed Consulting services which as I read is a Specified service and may or may not be excluded from the 20% reduction.

This is from the IRS website. A qualified trade or business is any trade or business, with two exceptions:

1)Specified service trade or business (SSTB), which includes a trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, investing and investment management, trading, dealing in certain assets or any trade or business where the principal asset is the reputation or skill of one or more of its employees. This exception only applies if a taxpayer’s taxable income exceeds $315,000 for a married couple filing a joint return, or $157,500 for all other taxpayers.

2)Performing services as an employee.

Question is. My client is filing a joint return and has a taxable income of $322,000. Does the exception (1) above taxable income exceeds $315,000 mean the taxpayer cannot qualify for the 20% reduction because of the exceeding the $315,000.

Also, does this $315,000 mean any of the activities shown above like Law, Accounting, etc can claim the 20% reduction as long as their taxable income does not exceed the $315,000.

Please, I welcome all comments.

[sjrcpa]

Yes and Yes