Should-Read: Ruth Simon: The Tax Break That Doctors and Plumbers Both Will Miss

Should-Read: What an enormous, unbelievable mess. The IRS ought to draw this tightly—goods producers, licensed architects, and degreed engineers qualify; everybody in the service sector is selling their “reputation or skill” and hence does not qualify. But I do not think that they will: Ruth Simon: The Tax Break That Doctors and Plumbers Both Will Miss: “Architecture and engineering groups…

“are right in the sweet spot”, said Mr. Viviano…. Owners of financial services, brokerage services and investment management firms cannot claim the deduction if their income is above the limits. Neither can the owner of a business “involving the performance of services” in health, law, accounting, performing arts, actuarial science, consulting or athletics. The “reputation or skill” clause could create a tax hurdle for celebrity chefs and people in many industries who built companies on their brands…. For celebrity brands, whether or not they get to benefit from the 20% deduction is likely to depend on a variety of factors, including the fine points of licensing agreements, said Howard Wagner, a managing director at the accounting firm Crowe Horwath LLP. “This stuff is as clear as mud,” he said….

Tax experts are looking to the Internal Revenue Service to help clarify many of the gray areas, including who falls under the reputation and skills limits and which businesses are covered by words such as “health” and “consulting.”… Marshall Goldsmith, a California-based executive coach, is among those struggling to determine whether he will be able to claim the new deduction. “My accountant is not sure how this impacts me,” Mr. Goldsmith said in an email. “I guess my answer is, ’I don’t know’”…