Qualified Business Income Deduction

The Qualified Business Income (QBI) Deduction allows eligible business owners to deduct up to 20% of their qualified business income from their taxable income. This benefits owners of pass-through entities like sole proprietorships, partnerships, and S-corporations by reducing their overall tax bill. The deduction aims to lower the tax burden without requiring the business to be a corporation. However, there are income limits and other specific rules that might affect eligibility, especially for certain service businesses or higher-income taxpayers. Overall, it helps small and professional businesses retain more of their earnings.