Photo by Ariel Skelley via Getty Images

Here's a personal finance query that will puzzle your advisor: Will he or she be able to snag this attractive tax break for small businesses? Earlier this month, the IRS and Treasury issued a proposed regulation addressing the 20 percent qualified business income deduction. This break, originally outlined in the Tax Cuts and Jobs Act, applies to so-called pass-through entities, including sole proprietorships, limited liability companies and S corporations. In that latest bit of guidance, the IRS put the kibosh on a number of aggressive tax planning strategies to help businesses qualify for the break.

We've been hearing from some of our larger advisory firms, that they're upset about not getting this deduction. Skip Schweiss president, TD Ameritrade Trust Co.

Uncle Sam also left some uncertainty, including whether the professionals who help you manage your money and protect your wealth would be able to take the break. "A lot of these things bleed into each other," said Troy Lewis, associate teaching professor at Brigham Young University and chairman of the qualified business income task force at the American Institute of CPAs. "It would be rare to find someone who is a stockbroker who doesn't also dabble in providing advice and managing assets," he said. Here's what the 20 percent deduction means for financial advisors.

Eligibility for the break

Hinterhaus Productions | The Image Bank | Getty Images

Entrepreneurs, regardless of the industry they are in, may take the full 20 percent deduction on qualified business income if they have taxable income that's under $157,500 if single or $315,000 if married. Once you exceed that threshold, limitations on who can take the break will apply. For instance, "specified service trades or businesses," which include doctors, lawyers and other specialists, can't take the deduction at all if their taxable income exceeds $207,500 if single or $415,000 if married. The rules are a little different for firms that don't fall into this catgegory. Those entrepreneurs receive a reduced deduction if their taxable income exceeds the $157,500/$315,000 threshold but is still below the $207,500/$415,000 threshold. The break they get is generally limited to 50 percent of wages they pay to employees, but owners can still collect a partial deduction if the business didn't pay wages. If your company is not a "specified service trade or business" and your taxable income is over the $207,500/$415,000 threshold, your deduction is generally limited based on wages you pay to your workers. You will get nothing if you are self-employed with no paid employees and exceed that limit.

Financial advisors

In its Aug. 8 proposal, the IRS clarified that wealth managers, financial advisors and stockbrokers, among others, would be considered "specified service trades or businesses." That means, as long as these professionals can keep their taxable income below $157,500 if single ($315,000 if married), they can claim the deduction. They're also barred from taking the break altogether if their income is too high. These advisors must also run their own businesses to qualify for the break; they can't be employees. More from Personal Finance

That 20 percent tax break for small businesses is no free-for-all. How to navigate

How to become a pass-through entity

Entrepreneurs still don't understand the new tax laws Here's where things get tricky. Independent insurance agents and brokers are not considered "specified service trades or businesses," so they would be able to qualify for some form of the break, even if their income is high. In this case, even if their taxable income exceeds $207,500 if single or $415,000 if married, these individuals may be eligible for a deduction that is limited based on the wages they pay employees.

If it ends up being that an insurance agent who holds himself out as a financial planner or a financial advisor is allowed further deductibility, then we're going to have a problem with that. Scott Beaudin chairman of the National Association of Personal Financial Advisors

This adds uncertainty for financial advisors, many of whom may offer life insurance and securities as part of a comprehensive financial plan. "If you're licensed to sell insurance and licensed to sell stocks, you understand one fundamental truth," said Lewis of Brigham Young University. "It's not easy to reorganize yourself, and it's cost prohibitive." For now, advisors are shying away from drastic structural changes to their firms. However, they are contacting the IRS, Treasury and elected officials to seek greater clarity on the deduction.

Insurance products

Hero Images | Getty Images

Fee-only advisors, who don't collect commissions for recommending financial products, have also raised concerns that the proposed guidance from the IRS unintentionally rewards advisors who sell insurance. "If it ends up being that an insurance agent who holds himself out as a financial planner or a financial advisor is allowed further deductibility, then we're going to have a problem with that," said Scott Beaudin, chairman of the National Association of Personal Financial Advisors, an organization that represents fee-only advisors. He said the association may submit a comment letter to the Treasury and IRS, seeking clarification on how the deduction applies.

Advisors' frustration

Artiga Photo | Getty Images