Pass through service business phase out

[GatorMD]

Despite multiple conversations on this topic on various forums, I still don’t think I quite understand this concept. I just formed an LLC and will choose to be taxed as an S-Corp in 2018. I have two Income streams - one as an IC EM doc and one as a faculty member. Both are IC positions and are paid as a 1099. Each of the positions will gross about $250k. If I create 2 separate LLCs would I qualify for the pass through deduction on each source of income individually given that half of my gross income (faculty position) will not fall into the “professional service” category and the other half (Clinical work) will below the $315k phase out?

[spiritrider]

Eligibility/phaseout is based on your personal taxable income (Form 1040 line 43), not the income of individual business(es).

[GatorMD]

Thanks for the clarification. With the cap on the SALT deductions I may be looking at a net increase in taxes here in my blue state of NY. Hopefully this will be balanced out by expected continued gains in the market.

[PhysicianOnFIRE]

I've got a guest post from @docnews explaining the pass-through deduction for physicians. It doesn't fully phase out unil $415,000 in taxable income.

It would not be unusual to have > $100K in deductions if you max a solo 401(k), pay health insurance, HSA, take standard deduction and deduct half of FICA tax. You may still quality for a partial pass-through deduction.

More details in @docnews post:

Tax Reform! How Physicians and the Self-Employed are Affected

[Dr. Mom]

Thank you docnews for the post.  Thank you POF for posting it in such a timely manner.  Appreciate you both.

Could either/both of you address spiritrider's comment below?

spiritrider wrote:

Eligibility/phaseout is based on your personal taxable income (Form 1040 line 43), not the income of individual business(es).

Click to expand...

I view it differently than s/he but do not have the knowledge base of him/her to be sure if I am right.  Thanks!