Qualified Business Income Deduction – Did You Know?
The Tax Cuts and Jobs Act (TCJA) created a new deduction for many taxpayers with business income. The Qualified Business Income (QBI) deduction applies to income derived from “pass-through entities”—businesses whose earnings are reported on individual owners’ tax returns rather than corporate returns. If you are a sole proprietor, partner, LLC owner, or shareholder in an S corporation, you may be eligible to claim the deduction.
If you qualify, you may be able to deduct a portion of your business earnings from your adjusted gross income (AGI) on your tax forms. Because the QBI deduction reduces your taxable income, it may result in significant tax savings.