WASHINGTON, D.C., January 18, 2019 — The Independent Insurance Agents & Brokers of America (IIABA or the Big “I") commends the Trump Administration for finalizing an IRS regulation making clear that owners and shareholders of insurance agencies and brokerages organized as pass-through entities can fully benefit from a new tax deduction.
“Today the IRS released a final regulation implementing a new section of the tax code to create a deduction for owners and shareholders of certain pass-through businesses, including insurance agencies and brokerages," says Bob Rusbuldt, Big “I" president & CEO. “This regulation is a major and hard-fought win for Big 'I' members—the vast majority of which are organized as pass-through entities. Prior to the regulation being finalized there was uncertainty surrounding the application of the deduction to insurance businesses."
Under the regulation, owners and shareholders of insurance agencies and brokerages can take up to a 20% tax deduction on qualified business income, no matter their taxable income levels, because the IRS does not consider insurance agents and brokers to be engaged in a “specified service trade or business." Owners and shareholders of “specified service trades and businesses" cannot take advantage of the deduction if their taxable income is over a certain level.
“Big 'I' members, whether organized as a pass-through entity or a C-corporation, can now rest assured that the tax reform law is working for them and their employees," says Charles Symington, Big “I" senior vice president of external, industry & government affairs. “We thank Congress for its previous work on this landmark tax law and the Administration for working to finalize this regulation as quickly as possible."
Founded in 1896, the Independent Insurance Agents & Brokers of America (IIABA or the Big “I") is the nation's oldest and largest national association of independent insurance agents and brokers, representing a network of approximately a quarter of a million agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products.
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