July 20, 2021

2021- 07/06 – 10 facts about the pass-through deduction for qualified business income

Are you eligible to take the deduction for qualified business income (QBI)? This valuable tax break is also referred to as the pass-through or Section 199A deduction. It’s available to owners of sole proprietorships, single member limited liability companies, partnerships and S corps. The deduction is intended to reduce the tax rate on QBI to a rate closer to the corporate tax rate. It’s available regardless of whether you itemize or take the standard deduction. The deduction is complex but is generally equal to 20% of qualified business income. There are two other limitations based on W-2 wages and on some “specified service trades or businesses.” Contact us with questions.