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§199A Pass-Through Deduction #290226

Course Overview

Credit

Amount

CPA

EA / OTRP

Course Author: Paul J. Winn CLU ChFC Field of Study (CPA): Taxes Field of Study (EA/OTRP): Federal Tax Law

Course Description

Course publication/revision date: This course was updated on 2/25/2026.

The Tax Cuts and Jobs Act of 2017 (TCJA), signed into law during the closing days of 2017, affects the tax planning and income tax liability for many taxpayers. Among those for whom the TCJA will have a more significant effect are business owners of pass-through trades or businesses who may be eligible for the TCJA’s pass-through deduction. This course will examine the pass-through deduction authorized under §199A of the TCJA.

The text is conceptually divided into three sections: First, calculation of the pass-through deduction for business owners whose taxable income does not exceed a threshold amount set by statute; second, calculation of the pass-through deduction for business owners whose taxable income is greater than the threshold; and finally, calculation of the pass-through deduction for business owners whose taxable income is greater than the threshold and whose businesses are considered specified service trades or businesses (SSTBs). The final chapter examines each of the business categories that are considered specified service trades or businesses and identifies those businesses that might appear to be placed in those categories but which would not be deemed SSTBs.

Table of Contents

Chapter 1 – Business Owners' Taxable Income Below Threshold1

Introduction	1
Chapter Learning Objectives	1
Overview of the Pass-Through Deduction	1
Nature of the 20 percent Deduction for Qualified Business Income	2
Deduction Eligibility	2
Computing the Deduction - Taxable Income Not Exceeding Threshold Amount	3
Definitions	5
Trade or Business	5
Threshold Amount	7
Qualified REIT Dividends	7
Qualified Publicly Traded Partnership Income	8
Qualified Business Income	8
Qualified Items of Income, Gain, Deduction and Loss	9
Qualified Trade or Business	10
Aggregation	10
Aggregation Rules	10
Reporting and Consistency Requirements	11
Accuracy-Related Penalty on Underpayments	13
Summary	13
Chapter 1 Quiz	15

Chapter 2 – When Taxable Income Exceeds the Threshold16

Introduction	16
Chapter Learning Objectives	16
Taxable Income Above Threshold Amount	16
Pass-Through Deduction when Taxable Income Exceeds the Threshold	16
QBI component.	17
Computing the Deduction - Taxable Income Exceeding Threshold Amount	18
Computing the Deduction - Examples	20
Example 1 – No Wages Paid or Qualified Property Held	20
Example 2 – Qualified Property Held	20
Example 3 – A Partnership	21
Example 4 – An S Corporation	21
Summary	22
Chapter 2 Quiz	23

Chapter 3 – When Taxable Income is Within Phase-In Range24

Introduction	24
Chapter Learning Objectives	24
Calculating the QBI Component	24
Taxpayers With Taxable Income Within Phase-In Range	24
Determining the Applicable Percentage	25
Calculating the Pass-Through Deduction – Modification for Non-SSTBs	25
Example 1 – Non-SSTB Modification	25
SSTBs and Taxpayers with Taxable Income in Phase-In Range	27
Calculating the Pass-Through Deduction – Modification for SSTBs	27
Example 2 – SSTB Modification	28
SSTBs and Taxpayers with Taxable Income Exceeding Phase-In Range	28
Summary	30
Chapter 3 Quiz	31

Chapter 4 – Specified Services Trades or Businesses (SSTBs)32

Introduction	32
Chapter Learning Objectives	32
Qualified Trade or Business	32
Specified Service Trade or Business	32
Summary	37
Chapter 4 Quiz	38

Answers to Review Questions39

Chapter 1	39
Chapter 2	40
Chapter 3	41
Chapter 4	42

Glossary44

Index47

Appendix A48

Appendix B49

Appendix C50

Course Details

Author: Paul J. Winn CLU ChFC

Paul J. Winn CLU ChFC — Financial Writer, Editor & Trainer. Education: B.A., St. John’s University (1961–1964); Law School, University of Virginia (1964–1965); MBA program Binghamton University (1986–1989); CLU (1985); ChFC (1987). Experience: Thirty years in the life insurance and investment industry (1965–1995). Thirty-one years as a financial writer, editor and trainer (1995–2026). Paul held positions at Mutual Life Insurance Company of New York as product developer and compensation officer; at Security Mutual Life Insurance Company as general agent, marketing vice president, and agency vice president; at Principal Financial Group as agency manager; and as president of Maryland Financial Corporation, managing a financial adviser corporation providing tax, investment and financial planning. As a writer and editor, Paul is a published book author whose books include Tax Planning from the Heart, Business Succession Planning, and Dominating Obamacare. He served as writer and editor of a major mutual life insurance company’s agent training university, created more than 200 insurance, securities and tax training courses in online, print and scripted classroom formats, and is the founder and CEO of Winn Publications LLC, a tax and insurance continuing education course licensor.

Publication/Revision Date: 2/25/2026

Course Exam Questions (online): 20 (multiple-choice)

Program Delivery Method: Self-Study (NASBA QAS Self-Study)

Available Formats of Course Text: Downloadable PDF, Printed/Mailed

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Overview	None	None
EA/OTRP	Overview	None	None

* This program is appropriate for professionals at all organizational levels.

Sponsor ID Numbers

National Registry of CPE Sponsors I.D.: 107615

IRS Qualified Sponsor I.D.: FWKKO

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

Explain how to compute the § 199A deduction for pass-through business owners whose taxable income is:
- Not in excess of the applicable threshold,
- In excess of the applicable threshold but not in excess of the sum of the threshold and phase-in range, and
- In excess of the sum of the applicable threshold and phase-in range;
Determine W-2 wages and the unadjusted basis of qualified property immediately after its acquisition (UBIA);
Define qualified business income (QBI), qualified REIT dividends and qualified publicly traded partnership (PTP) income and the special rules applicable to them;
Recognize the aggregation rules applicable to the § 199A deduction; and
Identify the trades or businesses considered specified service trades or businesses (SSTBs) that may be ineligible for the pass-through deduction.

Online Book, Online Exam

$35.00

Hardcopy Book, Online Exam

$47.00