Qualified Business Income Deduction Video
The new tax law contains major changes for businesses. One of the changes small business owners need to be aware of is Section 199A, also known as the Qualified Business Income deduction (QBI).
Under the TCJA, C-corps get a significant decrease in tax rates. The rates dropped from a top rate of 35% to a flat rate of 21%. The QBI deduction provides tax relief to small businesses that do not operate as C-corporations. It provides a deduction of up to 20% of income for eligible small businesses.
However, eligibility is complicated. There are income phase-out limits and it cannot be applied at all for specified service trades or businesses. The calculation and include-able income is also complex. To help explain more about the QBI deduction, please watch the video linked below from our senior tax accountant, Amber Beavers. hb&k is available to answer additional questions you may have about this deduction.
Click here to subscribe to our channel and watch from YouTube: Qualified Business Income deduction.