Qualified Business Income Deduction (QBI), Explained.

"Qualified Business Income Deduction (QBI) ... What is that?!?"

Do you want to reduce your taxable income? The QBI could be your answer.

Hey Taxpayers, Tiffany Gonzalez CPA is back with another great installment of "What is that?!?" Where we bring you financial terms and topics you may have heard, but we make them super easy to understand.

Today we are talking about the Qualified Business Income Deduction, which can lower your taxable income by as much as 20%!

The Qualified Business Income (QBI) deduction—a powerful tax benefit for small business owners, freelancers, and independent contractors. You'll learn how this deduction, introduced under the Tax Cuts and Jobs Act, can allow eligible taxpayers to deduct up to 20% of their qualified business income from their taxable income.

Tiffany will guide you through the key requirements, such as the types of businesses that qualify, the income thresholds, and how factors like wages paid and capital investment might impact your deduction.

Whether you're filing your taxes or planning for the future, this straightforward explanation will equip you with the knowledge to navigate the QBI deduction confidently.



Qualified Business Income Deduction QBI, Explained.
Time Interval: 00:00 - 03:34

Summary
📉 Reducing Taxable Income: The Qualified Business Income (QBI) deduction allows small business owners to deduct up to 20% of their net income.
🚫 Restrictions: There are several limitations based on income, business type, and the amount of wages or property a business holds.
📊 Income Thresholds: Full QBI deduction is available if married filing joint income is below $383,000 or individual income is below $191,000 in 2024.
⚠️ Specific Business Types: Specified service trades or businesses (SSTBs) such as law and accounting face stricter limitations on QBI deductions.
⏳ Temporary Benefit: The deduction is set to expire in 2025 unless extended by new legislation.
Insights Based on Numbers
💼 $383,000 (married filing jointly) and $191,000 (individual): Key income thresholds for qualifying for the full QBI deduction.
⏳ 2025 Expiration: The QBI deduction is scheduled to end after 2025, impacting future tax filings for many businesses.



Tune in and get your financial I.Q. up!

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