Professions that are probably going to win big from tax reform

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December 14, 2017 5:21 PM

A handful of occupations stand to benefit handsomely from Republican tax reform, thanks to the 20% tax deduction for pass-through businesses.

House and Senate Republicans have worked out
Republicans have presented the provision as a benefit for small business owners, but some experts have criticized it as a boon to the 1%.

The finalized Republican tax plan throws a 20% tax deduction the way of pass-through businesses.

Pass-through businesses — including LLCs and S-corporations — don't pay corporate taxes. Instead, income "passes through" to the owner, who then pays taxes on the earnings.

The House initially proposed a 25% reduced tax rate on business income from pass-through businesses, while the Senate's initial plan called for a 23% deduction.

Business Insider's Bob Bryan reported that Republicans have presented the provision as a benefit for small business owners. It includes guardrails designed to prevent firms such as hedge funds from claiming the deduction.

But the measure has been criticized by some as a boost to the 1%. According to Small Business Labs, this provision will likely benefit the wealthiest of pass-through business owners, but not highly-paid professionals who run "service firms," including doctors and lawyers.

Here's a look at some occupations that are likely to benefit most from the plan:

Tax accountants and attorneys

Politco's Bernie Becker reported the new plan is causing "

Real estate development fund owners

Business Insider's Bob Bryan reported that the provision "would allow owners of business that hold certain types of depreciable assets, such as real estate, to receive a significant deduction on their profits."

Small Business Labs reporters the owners of "very profitable" real estate development firms will also benefit from the plan.

Some small business owners

Small Business Labs predicted small business owners in the 35% or 39.6% tax bracket — meaning those who make over $416,700 a year — will see "."

Small business owners earn an average annual salary of $68,897, according to PayScale.

Some freelancers and contract workers

According to Small Business Labs, most consultants — freelancers or other contract workers who are not paid as employees — will not be able to find a way around the plan's "guard rails." But they predicted some high-earning consultants may slip through and benefit from the policy change.

Architects and engineers

Small brewers and distillers

Christmas tree farmers

Restaurant owners

Plumbers

Miners

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