Here's a breakdown of who can take it.
First, business owners in any industry may take the 20% deduction if they have taxable income that's under $157,500 if single or $315,000 if married and filing jointly in 2018.For starters, taxpayers in a "specified service trade or business," including doctors, lawyers and accountants, can't take the deduction at all if their taxable income exceeds $207,500 if single or $415,000 if married.
With it being the first year, I think everyone is still trying to figure it out. You'll see that number go up as returns start coming in this fall.The rules are a little different for business owners who aren't in a "specified service trade or business." In that case, you get a reduced deduction if your taxable income exceeds the $157,500/$315,000 threshold but is still under the $207,500/$415,000 threshold.
If your business isn't in a specified service trade or business, and your taxable income exceeds the $207,500/$415,000 threshold, then your deduction is generally capped as a percentage of W-2 wages paid to your employees.Early uncertaintySome accountants decided to proceed with caution on the deduction this spring, as the IRS proposed new guidelines for the rules in January 2019.