2018 Sec 199A example for machine shop sole proprietor.

Here’s an example of the new pass-through deduction for a sole proprietor machine shop with no employees:

Service business: No (manufacturer/wholesaler)

Taxable income on his/her tax return using the new rules: $185,000

Filing status: Single

Net income of the machine shop: $215,000

Section 199A deduction: $19,350