{"id":14004,"date":"2023-10-31T12:01:00","date_gmt":"2023-10-31T18:01:00","guid":{"rendered":"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/"},"modified":"2026-01-26T17:11:26","modified_gmt":"2026-01-26T17:11:26","slug":"specified-service-trade-or-business-sstb-definitions","status":"publish","type":"epkb_post_type_1","link":"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/","title":{"rendered":"Specified Service Trade or Business (SSTB) Definitions"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 ez-toc-wrap-right counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table Of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Key_Takeaways\" >Key Takeaways<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Health\" >Health<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Law\" >Law<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Accounting\" >Accounting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Actuarial_Science\" >Actuarial Science<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Performing_Arts\" >Performing Arts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Consulting\" >Consulting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Athletics\" >Athletics<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Financial_Services\" >Financial Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Brokerage_Services\" >Brokerage Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Investing_and_Investment_Management_Services\" >Investing and Investment Management Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Trading_Services_and_Dealing_in_Securities\" >Trading Services and Dealing in Securities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Reputation_or_Skill\" >Reputation or Skill<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Specified_Service_Trade_or_Business_Summary\" >Specified Service Trade or Business Summary<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Taxpayers_Comprehensive_Guide_to_LLCs_and_S_Corps_2025_Edition\" >Taxpayer\u2019s Comprehensive Guide to LLCs and S Corps 2025 Edition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Talk_to_a_Small_Business_CPA_About_Your_Situation\" >Talk to a Small Business CPA About Your Situation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Schedule_Discovery_Meeting_Now\" >Schedule Discovery Meeting Now<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Frequently_Asked_Questions\" >Frequently Asked Questions<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#What_is_a_Specified_Service_Trade_or_Business_SSTB\" >What is a Specified Service Trade or Business (SSTB)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Do_engineers_and_architects_qualify_as_SSTBs\" >Do engineers and architects qualify as SSTBs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Does_providing_advice_always_make_a_business_an_SSTB\" >Does providing advice always make a business an SSTB?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#How_does_performing_arts_income_affect_Section_199A_deductions\" >How does performing arts income affect Section 199A deductions?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#What_is_the_%E2%80%9Creputation_or_skill%E2%80%9D_clause\" >What is the \u201creputation or skill\u201d clause?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#When_does_SSTB_status_matter\" >When does SSTB status matter?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Can_a_software_developer_avoid_SSTB_classification\" >Can a software developer avoid SSTB classification?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Do_income_splits_between_activities_matter\" >Do income splits between activities matter?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Is_SSTB_classification_subjective\" >Is SSTB classification subjective?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/#Who_decides_SSTB_designation\" >Who decides SSTB designation?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text css=&#8221;&#8221; woodmart_inline=&#8221;no&#8221; text_larger=&#8221;no&#8221;]By <strong>Jason Watson, CPA<\/strong><br \/>\nPosted Wednesday, November 1, 2023<\/p>\n<div class=\"overview\">\n<h2><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span>Key Takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>Specified Service Trades or Businesses (SSTBs)\u00a0limit Section 199A deductions once income passes certain thresholds.<\/li>\n<li>Professions like health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, investing, and trading are classified as SSTBs.<\/li>\n<li>Engineers and architects are excluded, but may still qualify as SSTBs if their business relies mainly on reputation or skill.<\/li>\n<li>Health includes doctors, therapists, and veterinarians, but not operators of health clubs or nursing homes.<\/li>\n<li>Consulting applies only when advice or counsel is provided directly, not when advice is incidental to selling goods or services<\/li>\n<li>Writers, artists, and performers fall under SSTBs, but support roles like technicians or operators do not.<\/li>\n<li>Financial services include advising, wealth management, and brokerage, but not traditional banking or property management.<\/li>\n<li>The \u201creputation or skill\u201d clause is a broad catch-all that applies when income comes from endorsements, licensing, or appearance fees.<\/li>\n<li>The SSTB designation matters only if taxable household income exceeds the Section 199A deduction limits.<\/li>\n<\/ul>\n<p>Specified service trades or businesses is the bane of the Section 199A existence in so many ways. Let\u2019s start off with the definitions-<\/p>\n<ul>\n<li>Traditional service professions such as doctors, attorneys, accountants, actuaries and consultants.<\/li>\n<\/ul>\n<ul>\n<li>Performing artists who perform on stage or in a studio.<\/li>\n<\/ul>\n<ul>\n<li>Paid athletes.<\/li>\n<\/ul>\n<ul>\n<li>Anyone who works in the financial services or brokerage industry.<\/li>\n<\/ul>\n<ul>\n<li>And now the hammer\u2026 \u201cany trade or business where the principal asset is the reputation or skill\u201d of the owner. Why didn\u2019t they just start with this since everything else would have been moot. Oh well\u2026<\/li>\n<\/ul>\n<\/div>\n<p>Interestingly, removed from the traditional service profession are engineers and architects. But an engineer operating a business based on his or her reputation or skill might still be a specified service trade or business. In other words, reputation or skill might trump the fact that engineers and architects were purposely left off the list. Every consultant is suddenly going to reclassify themselves as an engineer; software consultant is now a software engineer. Watson Business Engineers has a nice ring to it. Hmm\u2026.<\/p>\n<p>The above terms were in the original Section 199A tax code. On August 8, 2018, the IRS published proposed regulations to help better explain the Section 199A Qualified Business Income Deduction including anti-abuse rules (yes, we are always gaming the system\u2026 just like in the backyard with cops and robbers). On January 18, 2019, the IRS published final Section 199A regulations. Here is a link to review the Section 199A Final Regulations-<\/p>\n<p><a href=\"https:\/\/wcginc.com\/wp-content\/documents\/FINAL-td-reg-107892-18.pdf\" target=\"_blank\" rel=\"noopener\">wcginc.com\/8323<\/a><\/p>\n<p>One of the areas that was addressed was SSTBs which is the acronym for specified service trade or business. This becomes super important if you find your taxable household income exceeding the top of the 24% marginal tax bracket. Here is the dirty baker\u2019s dozen, the unlucky 13-<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Health\"><\/span>Health<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>This encompasses all the people you think it would. Does not include health club operators but it does include physical and massage therapists. So, if you are a traveling nurse providing home health care, you are considered an SSTB. But, this same nurse buys and operates a nursing home, he or she would not be deemed an SSTB.<\/p>\n<p>We have consulted with clients who are practicing doctors, but they also sell personal property (like prosthetics). Now what? You are able to split up SSTB activities (being a doctor) and non-SSTB activities (selling medical devices), but rules are tricky and are beyond the scope of this book. Pharmacists also sell stuff; drugs and other \u201cretail\u201d items that are used for administration of health but they are wholly snagged in the health specified service trade or business.<\/p>\n<p>Veterinarians wanted it both ways. At parties, we are doctors. At the IRS office, we are just animal lovers making a buck. All kidding aside, veterinarians argued that pets are retail property and are not patients in the truest sense. The Treasury Department and the IRS relied on Revenue Ruling 91-30 from 1991, and other nuggets of code and case law to \u201cto continue the long-standing treatment of veterinary services as the performance of services in the field of health for purposes of section 199A and these final regulations.\u201d (Final Regs, pages 80-81).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Law\"><\/span>Law<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Not just attorneys, but also mediators, arbiters and paralegals.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Accounting\"><\/span>Accounting<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Not just CPAs, but any tax return preparer, enrolled agent (EA), financial auditor, forensic accountant, business valuator and bookkeeper. This designation does not necessarily rise and fall on credentials, such as <a href=\"https:\/\/wcginc.com\/blog\/difference-between-cpa-and-enrolled-agent\/\" target=\"_blank\" rel=\"noopener\">CPA or EA<\/a>. It would be nice if the regulations called out all Colorado Springs CPAs as a) pretty cool and b) exempt from Section 199A limits because of their coolness, but it doesn\u2019t. Our request was denied with prejudice.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Actuarial_Science\"><\/span>Actuarial Science<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Does not include analysts, economists, mathematicians and statisticians. Thank goodness, but then again how many mathematicians make over $326,600 (end of the 24% marginal tax bracket for 2020)? We want that job! Hats off to John Nash and his game theory mathematics however. Watch War Games again for some flashbacks; \u201cShall we play a game?\u201d<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Performing_Arts\"><\/span>Performing Arts<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Includes who you think it would include plus directors, writers, singers and musicians, but does not include those people or businesses supporting the performing arts such as make-up technicians, camera operators, maintenance personnel and other specialists. What does a key grip do anyway?<\/p>\n<p>Writers argued that writing does not require a unique skill, which is true if you recall that last bad movie you watched. The Treasury Department and the IRS said No with \u201cto the extent that a writer is paid for written material, such as a song or screenplay, that is integral to the creation of the performing arts, the writer is performing services in the field of performing arts.\u201d (Final Regs, page 84).<\/p>\n<p>Here is an example from <a href=\"https:\/\/wcginc.com\/wp-content\/documents\/FINAL-td-reg-107892-18.pdf\" target=\"_blank\" rel=\"noopener\">Section 199A\u2019s final regulations<\/a>&#8211;<\/p>\n<p style=\"margin-left: 40px;\">Gordon Lightfoot, a singer and songwriter, writes and records a song while driving on a highway. Gordon is paid a mechanical royalty when the song is licensed or streamed. Gordon is also paid a performance royalty when the recorded song is played publicly. Gordon is engaged in the performance of services in an SSTB in the field of performing arts within the meaning of section 199A(d)(2) or paragraphs (b)(1)(v) and (b)(2)(vi) of this section. The royalties that Gordon receives for the song are not eligible for a deduction under section 199A. (Final Regs, page 229)<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Consulting\"><\/span>Consulting<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Here is the verbiage right from the Final Regulation 1.199A; the performance of services in the field of consulting means the provision of professional advice and \u201ccounsel to clients to assist the client in achieving goals and solving problems.\u201d Note the words advice and counsel.<\/p>\n<p>If you can honestly say you don\u2019t offer direct advice or counsel, then you are not a consultant as it relates to specified service trades or businesses. The word consultant is watered down in life.<\/p>\n<p>Also, consulting services in connection with a sale or delivery of goods does not count either. A great example is a building contractor who is offering all kinds of advice and counsel to the client in an attempt to achieving goals and solving problems. Since this advice is inextricably embedded and is ancillary to the construction of a building, it is not considered consulting.<\/p>\n<p>What is the lesson here? If you think you are a consultant, spend some time thinking about exactly what you do. A person might consider themselves a software consultant, but in reality they are more of a software developer since they do not provide advice or counsel. Rather they do their thing, and sell apps for $1.99 making millions.<\/p>\n<p>Here is an example from Section 199A\u2019s final regulations-<\/p>\n<p style=\"margin-left: 40px;\">Bill Gates is in the business of licensing software to customers. Bill discusses and evaluates the customer\u2019s software needs with the customer. Bill advises the customer on the particular software products it licenses. Bill is paid a flat price for the software license. After the customer licenses the software, Bill helps to implement the software (in real life, Paul Allen would have). Bill is engaged in the trade or business of licensing software and not engaged in an SSTB in the field of consulting within the meaning of section 199A(d)(2) or paragraphs (b)(1)(vi) and (b)(2)(vii) of this section. (Final Regs, page 231)<\/p>\n<p>Some states or regulatory agencies require certain professions to bill separately for consulting services. Those separate billings might be considered an SSTB.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Athletics\"><\/span>Athletics<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Sure. Got it. But be careful since it also includes coaches and team managers.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Financial_Services\"><\/span>Financial Services<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>All the usual suspects but the preamble to the proposed regulations states that banking services such as taking deposits and lending money are not considered financial services. This makes sense since taking deposits and lending money is a retail activity in several ways, where advice and counsel (not those words again) specific to a client is a financial service.<\/p>\n<p>What about insurance agents? Here is a blurb from the Section 199A final regulations-<\/p>\n<p style=\"margin-left: 40px;\">The Treasury Department and the IRS decline to categorically exclude services provided by insurance agents from the definition of financial services as financial services such as managing wealth, advising clients with respect to finances, and the provision of advisory and other similar services that can be provided by insurance agents. However, the Treasury Department and the IRS note that the provision of these services to the extent that they are ancillary to the commission-based sale of an insurance policy will generally not be considered the provision of financial services for purposes of section 199A.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Brokerage_Services\"><\/span>Brokerage Services<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Anyone who facilitates a transaction for a commission or a fee. Slow down though! The proposed regulations specifically say brokerage services do not include services provided by real estate agents and brokers, or insurance agents and brokers. Help someone sell their business, you are a specified service trade or business. Help someone sell their house, not so much. Gotta love a good lobby.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Investing_and_Investment_Management_Services\"><\/span>Investing and Investment Management Services<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Again, the usual suspects. Does not include property management however. You can see why the Proposed Regs 1.199A had to mention this since technically property managers are managing investments although the investments are houses.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Trading_Services_and_Dealing_in_Securities\"><\/span>Trading Services and Dealing in Securities<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Trading securities, eleven. Dealing Securities, twelve. Got it.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Reputation_or_Skill\"><\/span>Reputation or Skill<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>This is the hammer. Unlucky number 13! The direct verbiage reads, \u201cany trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners.\u201d This will be heavily litigated and shaped over time. This will also be the catch-all if the IRS challenges your trade or business to deem it a SSTB.<\/p>\n<p>A bit of caution here. Business owners are proud, and for good reasons. As such they think their reputation or skill is the primary source of revenue. Perhaps. Perhaps not. We like to use the example of Dr. James Andrews; he is the go-to guy for the NFL on all knee injuries. Certainly his reputation or skill is known all over the country, and people ask for him by name.<\/p>\n<p>The Section 199A final regulations summarize the reputation or skill issue fairly well-<\/p>\n<p style=\"margin-left: 40px;\">If Congressional intent was to exclude all service businesses, Congress clearly could have drafted such a rule. Accordingly, the final regulations retain the proposed rule limiting the meaning of the reputation or skill clause to fact patterns in which an individual or RPE (relevant pass-thru entity) is engaged in the trade or business of receiving income from endorsements, the licensing of an individual\u2019s likeness or features, and appearance fees. (Final Regs, page 98)<\/p>\n<p>Here is an example from Section 199A\u2019s final regulations-<\/p>\n<p style=\"margin-left: 40px;\">Gordon Ramsay is a well-known chef and the sole owner of multiple restaurants each of which is owned in a disregarded entity. Due to Gordon\u2019s skill and reputation as a chef, Gordon receives an endorsement fee of $500,000 for the use of his name on a line of cooking utensils and cookware. Gordon is in the trade or business of being a chef and owning restaurants and such trade or business is not an SSTB. However, Gordon is also in the trade or business of receiving endorsement income. Gordon\u2019s trade or business consisting of the receipt of the endorsement fee for Gordon\u2019s skill and\/or reputation is an SSTB within the meaning of section 199A(d)(2) or paragraphs (b)(1)(xiii) and (b)(2)(xiv) of this section. (Final Regs, page 232)<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Specified_Service_Trade_or_Business_Summary\"><\/span>Specified Service Trade or Business Summary<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Sit on the ledge, sure, but don\u2019t jump off a bridge just yet. The specified service trade or business problem only comes up when your taxable income exceeds the limits. So, a financial advisor making $150,000 might still enjoy the Section 199A deduction. Please read this again! We have been stuck in a handful of debates with clients about the specified service trade or business designation just to find out they make $100,000 as a household.<\/p>\n<p>Where does WCG land on all this? Quite simple. In matters where it is unclear, like the software consultant who could argue he or she is a software developer, our firm will present both sides of the argument to you. At the end of it all, you decide. Secretly we would rather error on the side of client advocacy in cases where it is not clear. Ultimately it remains your decision (again, in matters where it is unclear or very subjective).[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space height=&#8221;25px&#8221;][vc_column_text]<style data-type=\"vc_shortcodes-custom-css\">#wd-6915e3dd2a9b5 .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-6915e3dd2a9b5 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-6915e437409dd .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-6915e437409dd .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68460c16bff16 .info-box-title{line-height:60px;font-size:50px;color:#473d3c;}#wd-68460c16bff16 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-687b937e0887f .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-687b937e0887f .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-687b9384e0d51 .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-687b9384e0d51 .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-687b938a8f4b3 .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-687b938a8f4b3 .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-68bcf7fc8516a .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-68bcf7fc8516a .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68bcfccd83cf7 .info-box-title{line-height:46px;font-size:36px;color:#473d3c;}#wd-68bcfccd83cf7 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}@media (max-width: 1199px) {#wd-6915e3dd2a9b5 .info-box-title{line-height:34px;font-size:24px;}#wd-6915e3dd2a9b5 .info-box-inner{line-height:24px;font-size:14px;}#wd-6915e437409dd .info-box-title{line-height:34px;font-size:24px;}#wd-6915e437409dd .info-box-inner{line-height:24px;font-size:14px;}#wd-68460c16bff16 .info-box-title{line-height:50px;font-size:40px;}#wd-687b937e0887f .info-box-title{line-height:25px;font-size:15px;}#wd-687b9384e0d51 .info-box-title{line-height:25px;font-size:15px;}#wd-687b938a8f4b3 .info-box-title{line-height:25px;font-size:15px;}#wd-68bcf7fc8516a .info-box-title{line-height:34px;font-size:24px;}#wd-68bcf7fc8516a .info-box-inner{line-height:24px;font-size:14px;}#wd-68bcfccd83cf7 .info-box-title{line-height:36px;font-size:26px;}#wd-68bcfccd83cf7 .info-box-inner{line-height:24px;font-size:14px;}}@media (max-width: 767px) {#wd-6915e3dd2a9b5 .info-box-title{line-height:28px;font-size:18px;}#wd-6915e3dd2a9b5 .info-box-inner{line-height:24px;font-size:14px;}#wd-6915e437409dd .info-box-title{line-height:28px;font-size:18px;}#wd-6915e437409dd .info-box-inner{line-height:24px;font-size:14px;}#wd-68460c16bff16 .info-box-title{line-height:40px;font-size:30px;}#wd-687b937e0887f .info-box-title{line-height:24px;font-size:14px;}#wd-687b9384e0d51 .info-box-title{line-height:24px;font-size:14px;}#wd-687b938a8f4b3 .info-box-title{line-height:24px;font-size:14px;}#wd-68bcf7fc8516a .info-box-title{line-height:28px;font-size:18px;}#wd-68bcf7fc8516a .info-box-inner{line-height:24px;font-size:14px;}#wd-68bcfccd83cf7 .info-box-title{line-height:28px;font-size:18px;}#wd-68bcfccd83cf7 .info-box-inner{line-height:24px;font-size:14px;}}<\/style><div class=\"wpb-content-wrapper\">[vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6915e3dd2a9b5\" class=\" wd-rs-6915e3dd2a9b5 wd-info-box wd-wpb text-center box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p style=\"text-align: center;\"><em>Jason Watson, CPA, is a Partner and the CEO of <strong>WCG CPAs &amp; Advisors<\/strong>, a boutique yet progressive tax, accounting and business consultation firm located in Colorado serving small business owners and taxpayers worldwide.<\/em><\/p>\n<div style=\"display: flex; justify-content: center;\"><a href=\"https:\/\/www.linkedin.com\/in\/jason-watson-cpa\/\"><img decoding=\"async\" class=\"alignnone wp-image-17327 entered lazyloaded\" style=\"height: 35px!important; width: auto!important;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/linkedin-150x150-1.png.webp\" alt=\"Jason Watson CPA LinkedIn\" \/><\/a>\u00a0\u00a0\u00a0\u00a0\u00a0<a href=\"mailto:jason@wcginc.com\"><img decoding=\"async\" class=\"alignnone size-thumbnail wp-image-17334 entered lazyloaded\" style=\"height: 35px!important; width: auto!important;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/mail-150x150-1.png.webp\" alt=\"Jason Watson CPA Email\" \/><\/a><\/div>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6915e437409dd\" class=\" wd-rs-6915e437409dd wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title img-right kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-800 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Taxpayers_Comprehensive_Guide_to_LLCs_and_S_Corps_2025_Edition\"><\/span>Taxpayer\u2019s Comprehensive Guide to LLCs and S Corps 2025 Edition<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p><img decoding=\"async\" class=\"size-full wp-image-31529 alignnone\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/LLC-S-Corp-Web-and-Social-GFX_275-250x300-1.webp\" alt=\"Taxpayer\u2019s Comprehensive Guide to LLCs and S Corps 2025 Edition\" width=\"250\" height=\"300\" \/>This KB article is an excerpt from our 420+ page book (some picture pages, but no scatch and sniff) which is available in paperback from\u00a0<a href=\"https:\/\/www.wcginc.com\/amazon\" target=\"_blank\" rel=\"noopener\">Amazon<\/a>, as an eBook for\u00a0<a href=\"https:\/\/www.wcginc.com\/kindle\" target=\"_blank\" rel=\"noopener\">Kindle<\/a>\u00a0and as a\u00a0<a href=\"https:\/\/www.wcginc.com\/pdf\" target=\"_blank\" rel=\"noopener\">PDF<\/a>\u00a0from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles online, click on the fancy buttons below or\u00a0<a href=\"https:\/\/wcginc.com\/business-services\/book\/\" target=\"_blank\" rel=\"noopener\">visit our webpage<\/a>\u00a0which provides more information.<\/p>\n<table class=\"purchase-table\">\n<tbody>\n<tr>\n<td style=\"text-align: center;\"><a href=\"\/amazon\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6657 aligncenter\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/amazon-imageresized.png.webp\" alt=\"LLCs and S Corp Book Amazon\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"\/kindle\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6658\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/kindle-imageresized.png.webp\" alt=\"LLCs and S Corp Book Kindle\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"\/pdf\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6659 aligncenter\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/PDFresized.png.webp\" alt=\"LLCs and S Corp Book PDF\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><strong>$49.95<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>$39.95<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>$29.95<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row equal_height=\"yes\" content_placement=\"top\" el_id=\"consultation-secc\" woodmart_css_id=\"6756f7d427735\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzU2ZjdkNDI3NzM1Iiwic2hvcnRjb2RlIjoidmNfcm93IiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\" el_class=\"kb-consult\"][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68460c2ba6365\" class=\" wd-rs-68460c2ba6365 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title kb-fix \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title box-title-style-default wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Talk_to_a_Small_Business_CPA_About_Your_Situation\"><\/span>Talk to a Small Business CPA About Your Situation<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Please use the form below to tell us a little about yourself, and what you have going on with your small business or 1099 contractor gig. <strong>WCG CPAs &amp; Advisors<\/strong> are small business CPAs, tax professionals and consultants, and we look forward to talking to you!<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner el_id=\"consultation-inner\" woodmart_css_id=\"66fd6caf92fc0\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NmZkNmNhZjkyZmMwIiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner][vc_raw_js el_class=\"defaultBot\"]JTNDc2NyaXB0JTIwdHlwZSUzRCUyMnRleHQlMkZqYXZhc2NyaXB0JTIyJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZ3Y2dpbmMuam90Zm9ybS5jb20lMkZqc2Zvcm0lMkYyNTE2NjQ4Nzk0MTQ5NzMlMjIlM0UlM0MlMkZzY3JpcHQlM0U=[\/vc_raw_js][\/vc_column_inner][\/vc_row_inner]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68460c16bff16\" class=\" wd-rs-68460c16bff16 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title defaultBot \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>The tax advisors, business consultants and rental property experts at <strong>WCG CPAs &amp; Advisors<\/strong> are not salespeople; we are not putting lipstick on a pig expecting you to love it. Our job remains being professionally detached, giving you information and letting you decide within our ethical guidelines and your risk profiles.<\/p>\n<p>We see far too many crazy schemes and half-baked ideas from attorneys and wealth managers. In some cases, they are good ideas. In most cases, all the entities, layering and mixed ownership is only the illusion of precision. As Chris Rock says, just because you can drive your car with your feet doesn\u2019t make it a good idea. In other words, let\u2019s not automatically convert \u201cyou can\u201d into \u201cyou must.\u201d<\/p>\n<p><strong>Let\u2019s chat so you can be smart about it.<\/strong><\/p>\n<p>We typically schedule a 20-minute complimentary quick chat with one of our Partners or our amazing Senior Tax Professionals to determine if we are a good fit for each other, and how an engagement with our team looks. Tax returns only? Business advisory? Tax strategy and planning? Rental property support?<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner equal_height=\"yes\" el_class=\"boxes--pack\" woodmart_css_id=\"673b5f334f247\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzNiNWYzMzRmMjQ3Iiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-687b937e0887f\" class=\" wd-rs-687b937e0887f wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Text-WCG-Offices-1.jpg\" class=\"attachment-full size-full\" alt=\"Text WCG Offices\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Text WCG Offices<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Need to get in touch through a quick text?\u00a0 We\u2019ll respond back within a day and get going!<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<a class=\"wd-info-box-link wd-fill\" aria-label=\"Infobox link\" href=\"sms:+17193452100?&amp;body=Hey%20WCG!%20Please%20call%20me%20to%20discuss%20your%20CPA%20services\" title=\"\"><\/a>\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-687b9384e0d51\" class=\" wd-rs-687b9384e0d51 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Chat-Our-Amazing-Team-1.jpg\" class=\"attachment-full size-full\" alt=\"Chat our amazing team\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Call Our Amazing Team<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p class=\" \">If you need to speak to a tax professional now, give us a call and we'll get you connected.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<a class=\"wd-info-box-link wd-fill\" aria-label=\"Infobox link\" href=\"tel:719-387-9800\" title=\"\"><\/a>\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-687b938a8f4b3\" class=\" wd-rs-687b938a8f4b3 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes nav-button-chat \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Chat-With-a-Tax-Pro-2.jpg\" class=\"attachment-full size-full\" alt=\"Chat with a tax pro\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Chat With a Tax Pro<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Taxes can be tricky. Chat with a WCG human now and get questions answered.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row equal_height=\"yes\" content_placement=\"top\" woodmart_css_id=\"684abef7ecaa9\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2ODRhYmVmN2VjYWE5Iiwic2hvcnRjb2RlIjoidmNfcm93IiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\" el_class=\"kb-consult\"][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68bcf7fc8516a\" class=\" wd-rs-68bcf7fc8516a wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Schedule_Discovery_Meeting_Now\"><\/span>Schedule Discovery Meeting Now<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner content_placement=\"middle\" el_class=\"client-review-secs box--card\" woodmart_css_id=\"672e712482714\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzJlNzEyNDgyNzE0Iiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner width=\"1\/3\" woodmart_css_id=\"671780b35b49a\" parallax_scroll=\"no\" woodmart_sticky_column=\"false\" wd_collapsible_content_switcher=\"no\" wd_column_role_offcanvas_desktop=\"no\" wd_column_role_offcanvas_tablet=\"no\" wd_column_role_offcanvas_mobile=\"no\" wd_column_role_content_desktop=\"no\" wd_column_role_content_tablet=\"no\" wd_column_role_content_mobile=\"no\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_box_shadow=\"no\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzE3ODBiMzViNDlhIiwic2hvcnRjb2RlIjoidmNfY29sdW1uX2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" wd_z_index=\"no\"]\t\t<div id=\"wd-68874e76cd7bc\" class=\"wd-image wd-wpb wd-rs-68874e76cd7bc text-left \">\n\t\t\t\n\t\t\t<img decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/265518_2057667071_tax_consultation_300-1.webp\" class=\"attachment-full size-full\" alt=\"Request a Meeting with WCG Inc\" \/>\n\t\t\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"2\/3\" woodmart_css_id=\"671780c0415fb\" parallax_scroll=\"no\" woodmart_sticky_column=\"false\" wd_collapsible_content_switcher=\"no\" wd_column_role_offcanvas_desktop=\"no\" wd_column_role_offcanvas_tablet=\"no\" wd_column_role_offcanvas_mobile=\"no\" wd_column_role_content_desktop=\"no\" wd_column_role_content_tablet=\"no\" wd_column_role_content_mobile=\"no\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_box_shadow=\"no\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzE3ODBjMDQxNWZiIiwic2hvcnRjb2RlIjoidmNfY29sdW1uX2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" wd_z_index=\"no\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68bcfccd83cf7\" class=\" wd-rs-68bcfccd83cf7 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none with-btn box-btn-static \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Ready to schedule now and talk about S Corp and reasonable salary and all that gibberish? Let's do it! Here is a link to a Discovery Meeting with one of our Partners or Senior Tax Professionals to understand your tax footprint and objectives, and how <strong>WCG CPAs &amp; Advisors<\/strong> might help.<\/p>\n<\/div>\n\n\t\t\t\t\t\t<div class=\"info-btn-wrapper\"><div id=\"wd-6a31bd6612136\" class=\"  wd-button-wrapper text-left\"><a href=\"https:\/\/calendly.com\/wcg-cpas-advisors\/discovery-meeting-instant\" title=\"\" target=\"_blank\" class=\"btn btn-style-default btn-shape-rectangle btn-size-default\">Schedule Meeting<\/a><\/div><\/div>\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row]<\/div>[\/vc_column_text]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68b5bf99453b1\" class=\" wd-rs-68b5bf99453b1 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title faqs-wrap \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title box-title-style-default wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_is_a_Specified_Service_Trade_or_Business_SSTB\"><\/span>What is a Specified Service Trade or Business (SSTB)?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A business in certain fields like health, law, accounting, performing arts, consulting, and others, or one where reputation or skill is the primary asset.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Do_engineers_and_architects_qualify_as_SSTBs\"><\/span>Do engineers and architects qualify as SSTBs?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Usually no, but if the business depends on the owner\u2019s reputation or skill, they may be classified as SSTBs.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Does_providing_advice_always_make_a_business_an_SSTB\"><\/span>Does providing advice always make a business an SSTB?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Only if it qualifies as consulting\u2014giving professional advice or counsel. Selling products or implementing services typically does not.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"How_does_performing_arts_income_affect_Section_199A_deductions\"><\/span>How does performing arts income affect Section 199A deductions?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Royalties and payments for creative works are treated as SSTB income, which may limit deductions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_is_the_%E2%80%9Creputation_or_skill%E2%80%9D_clause\"><\/span>What is the \u201creputation or skill\u201d clause?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>It captures income primarily earned from endorsements, licensing, or appearance fees tied to personal skill or fame.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"When_does_SSTB_status_matter\"><\/span>When does SSTB status matter?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Only when taxable income exceeds the Section 199A thresholds; lower-income taxpayers can usually claim the full deduction.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Can_a_software_developer_avoid_SSTB_classification\"><\/span>Can a software developer avoid SSTB classification?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Yes, if the work is product-based (e.g., licensing software) rather than providing consulting or professional advice.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Do_income_splits_between_activities_matter\"><\/span>Do income splits between activities matter?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Yes, separating SSTB and non-SSTB activities can impact deduction eligibility.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Is_SSTB_classification_subjective\"><\/span>Is SSTB classification subjective?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Often yes\u2014interpretation may vary, and professional guidance is recommended for borderline cases.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Who_decides_SSTB_designation\"><\/span>Who decides SSTB designation?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The IRS defines it via Section 199A regulations; taxpayers can present arguments in cases where classification is unclear.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Specified service trades or businesses is the bane of the Section 199A existence in so many ways. Let\u2019s start off with the definitions[&#8230;]<\/p>\n","protected":false},"author":6,"featured_media":610,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"epkb_post_type_1_category":[79],"epkb_post_type_1_tag":[],"class_list":["post-14004","epkb_post_type_1","type-epkb_post_type_1","status-publish","has-post-thumbnail","hentry","epkb_post_type_1_category-chap-7-section-199a-deduction-analysis"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.8 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Specified Service Trade or Business - SSTB Definitions - WCG CPAs &amp; Advisors<\/title>\n<meta name=\"description\" content=\"Specified service trades or businesses (SSTB) is the bane of the Section 199A existence. Contact WCG for specified service trade or business consulting.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wcginc.com\/kb\/specified-service-trade-or-business-sstb-definitions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Specified Service Trade or Business (SSTB) Definitions\" \/>\n<meta property=\"og:description\" content=\"Specified service trades or businesses (SSTB) is the bane of the Section 199A existence. 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