The Tax Cuts and Jobs Act (TCJA) made the qualified business income (QBI) deduction one of its cornerstones.
Through 2025, the QBI write-off is available to eligible individuals, estates, and trusts. But here we will focus on individuals.
Because the QBI deduction is scheduled to disappear after 2025, taking steps to maximize the write-off while it’s still on the books seems like a good idea. In other words, use it before lawmakers allow it to go away.
Here’s what you need to know to do that, starting with some necessary background information.
QBI Deduction Basics
The QBI deduction can be up to 20 percent of
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QBI earned from a sole proprietorship or a single-member LLC that’s treated as a sole proprietorship for federal income tax purposes, plus
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QBI from a pass-through business entity, meaning a partnership, a multi-member LLC that’s treated as a partnership for federal income tax purposes, or an S corporation.
You can also claim a QBI deduction for up to 20 percent of qualified dividends from real estate investment trusts and up to 20 percent of qualified income from ... Log in to view full article.
