Thanks to the Tax Cuts and Jobs Act, sole proprietors and owners of pass-through entities, such as partnerships, S corporations and, generally, limited liability companies, may be able to claim tax deductions based on their qualified business income (QBI) and certain other income.
This deduction can be up to 20% of your QBI, subject to limits that apply at higher income levels. However, some tax planning strategies can increase or decrease your allowable QBI deduction for 2024. So, if you’re eligible for this deduction, it’s essential to consider the impact other year-end strategies will have on it before executing them. Also, keep in mind that the QBI deduction is scheduled to expire at the end of 2025 unless Congress acts to extend it.
Please contact our office for help optimizing your overall tax results.