Insights
Analysis
Pass-Through Owners Before the 2025 Sunset: Modeling Life After Section 199A
For many owners, the most important 2025 tax question is not what the current deduction is. It is what the business and owner cash-tax picture looks like if Section 199A disappears on schedule.
Why modeling matters
The effect of losing the deduction is not identical across businesses. Compensation structure, income level, state tax exposure, and entity form all influence the result.
What to model now
- owner-level effective rate with and without Section 199A
- distribution policy under higher owner tax cost
- whether entity structure still fits the long-term plan
- related estate or transfer planning tied to projected after-tax cash flow
Bottom line
Owners should treat 2025 as a modeling year, not just a waiting year.
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