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QBI deduction: A tax savings for self-employed and small business owners
Are you self-employed or a small business owner? Learn more about the QBI deduction, which could lower your tax burden if you’re eligible.
finance.yahoo.com
QBI deduction: A tax savings for self-employed and small business owners
Part of the 2017 Tax Cuts and Jobs Act (TCJA), the QBI deduction allows eligible self-employed taxpayers and small business owners to deduct up to 20% of qualifying business income on their federal income taxes.
This deduction, also known as the Section 199a deduction, reduces your taxable business income and can result in a lower tax burden or a larger refund, depending on your financial situation. It’s available whether you itemize your deductions or take the standard deduction.
Enacted in 2017 for the 2018 tax year, the QBI tax deduction is currently available through the 2025 tax year. That said, it’s possible that this deduction will be extended depending on future tax reforms. But for now, if your business is eligible, claiming the QBI deduction could give you a tax break whether you itemize deductions on Schedule C or take the standard deduction.