In 2024 the projected threshold amounts for the Section 199A qualified business income deduction will be $191,950 for individual filers and $383,900 for joint filers. Refer to IRS information: - Qualified Business Income Deduction - Qualified Business Income Deduction FAQs Limitation on Deductibility of Business Interest. The 2017 Tax Cuts and Jobs Act also added new language limiting the deductibility of interest paid by the business to 30 percent of the business’s adjusted taxable income. This would include, for example, interest paid to a commercial lender on a business loan. For S corporations and partnerships the limitation is applied at the partner or shareholder level. But taxpayers that have annual gross receipts of $25 million or less during the preceding three years are exempt from this provision. Refer to IRS information:
- Credits and deductions for businesses - Business Expenses, Publication 535
Minnesota Corporate (Franchise) Tax Rates. The Minnesota corporate income tax rate is 9.8 percent. Corporations are subject to an alternative minimum tax based on Minnesota alternative minimum taxable income at the 5.8 percent. The amount due is the excess of the alternative minimum tax liability over business’ regular franchise liability. Minnesota Minimum Fee Rates. A graduated minimum fee is imposed on Minnesota entities filing as corporations, S corporations, and partnerships. The fee is indexed annually for inflation. The 2023 brackets are: Minnesota property, payroll, and sales Fee Less than $1,160,000 $0 $1,160,000 to $2,309,999 $240 $2,310,000 to $11,569,999 $690 $11,570,000 to $23,139,999 $2,310 $23,140,000 to $46,279,999 $4,640 $46,280,000 or more $11,570 Minnesota Single Factor Apportionment Formula. Businesses that operate both within and outside of Minnesota are required to calculate the amount of income subject to Minnesota tax by allocating the business income to Minnesota based on the percentage of sales made within Minnesota compared to total sales.
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