Welcome to Tax Deduction Tuesday!
Today, we’re focusing on the Qualified Business Income (QBI) deduction, a powerful tool that can save your business up to 20% on qualified income. The QBI deduction is designed to benefit owners of pass-through entities such as S-corporations, partnerships, and sole proprietorships.
This deduction can be complex, as it involves various limitations and thresholds based on your taxable income and the type of business you operate.
Here are a few key points to consider:
• Income Thresholds: For 2024, the deduction starts phasing out for single filers with taxable income above $182,100 and joint filers above $364,200.
• Specified Service Trades or Businesses (SSTBs): Certain professional fields, such as health, law, and accounting, have additional limitations.
• W-2 Wage Limit: The deduction may be limited based on the amount of W-2 wages paid and the unadjusted basis of qualified property held by the business.
Additionally, it is important to note that the QBI deduction will expire after the 2025 tax year. This means that unless Congress takes action to extend it, it will no longer be available starting in 2026.
Please contact us to learn more about how we can assist you in making the most of the QBI deduction.