Tax Law Changes Prompt Business Entity Review in Response to Permanent Deductions
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What happened
Tax laws enacted in July 2025 have changed the equation for business entity selection, according to Tony Nitti, a partner in the National Tax Department at EY US. The temporary Section 199A deduction of 20% off qualified business income for pass-through businesses was made permanent. Furthermore, the law included an expanded exclusion that allows individuals to avoid taxes on qualified small business stock under Section 1202.
From accountingtoday.com
Why it matters
Nitti stated that these changes are leading to a situation in the tax industry not seen since before 1986. He noted that many businesses are willingly moving to C corporation structures. Consequently, clients must reassess the assumption that pass-through businesses are always the optimal structure.
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From accountingtoday.com