25 Apr 2023
The Qualified Business Income Deduction: Learn More How It Can Help your Small Business Client
Many owners of sole proprietorships, partnerships, S corporations, and some trusts and estates may be eligible for a qualified business income (QBI) deduction—also called the Section 199A deduction. The deduction allows eligible taxpayers to deduct up to 20% of their QBI, plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. Income earned through a C corporation or by providing services as an employee is not eligible for the deduction. Learn more about the filing requirements to claim the QBI deduction by reading this practice note.
Related Content
- Qualified Business Income Deduction: Final Regulations Explained
Discover the elements required for a sale of property to constitute a capital transaction. This practice note sets forth best practices for your client because it analyzes how to properly classify property items as capital assets. It also reviews the requirements for a transaction to qualify as a sale or exchange.
- Pass-Through Entities Taxation
Learn more about qualified trades or businesses eligible for the Section 199A deduction. In general, qualified business income is the net amount of domestic qualified items of income, gain, deduction, and loss with respect to the taxpayer's qualified businesses.
Practical Guidance Updates
Featuring the latest updates from your Practical Guidance account.
- Tax Key Legal Developments Tracker (Federal)—keep up to date with key legal developments!
- Business Entities. IRS and Treasury propose regulations identifying transactions that are the same as, or substantially similar to, certain micro-captive transactions as listed transactions, a type of reportable transaction, and certain other micro-captive transactions as transactions of interest, another type of reportable transaction. 88 FR 21547 (Apr. 10, 2023) (Micro-captive Listed Transactions and Micro-captive Transactions of Interest—Notice of proposed rulemaking and notice of public hearing).
- Business Entities. IRS and Treasury propose regulations to implement the advanced manufacturing investment credit established by the CHIPS Act of 2022 to incentivize the manufacture of semiconductors and semiconductor manufacturing equipment within the U.S. 88 Fed. Reg. 17451 (Mar. 23, 2023) (Advanced Manufacturing Investment Credit—Notice of proposed rulemaking).
- Individual Income Tax. IRS and Treasury Department announce their intention to issue guidance related to the treatment of certain nonfungible tokens (NFTs) as collectibles under R.C. § 408(m).Notice 2023-27.
- Document alerts allow you to stay current on legal developments that affect your practice. Find out how to set up your document alerts.
- The Practical Guidance Journal Climate Change Special Edition features guidance on insuring for climate change, renewable energy initiatives, and a guide for public and private projects related to sea level rise.
- Legal Developments provide the latest updates and analyses of emerging topics impacting your practice area. Visit the Legal Developments page to see the latest topics, which also include breaking legal news and related Practical Guidance content.
- Listen Up! The Practical Guidance and Law360 Podcasts Resource Kit features interviews with industry-leading attorneys on cutting edge issues in the law: NFTs, Cannabis, Mass Torts, and more.
- Check out the new Practical Guidance Author Center! Learn about the 1750+ leading attorney authors contributing to our 22 practice areas and find out how you can Become a Practical Guidance Author.
- New and Recently Updated Practical Guidance Content
- Transfer Pricing Safe Harbors
- Partnerships and Related Party Transactions
- International Tax Resource Kit
- Deducting Losses: Casualty and Theft, Disaster, NOLs for Individuals, Investment Loss
- Broker and Barter Exchange Transaction Reporting (IRS Form 1099-B): Guidance for Completing, Filing, and Amending
- IRS Form 1120 (U.S. Corporation Tax Return): Guidance for Completing, Filing, and Amending
PRACTICAL GUIDANCE CUSTOMER EMAIL EDITION ON THE WEB
Experience results today with practical guidance, legal research, and data-driven insights—all in one place.
Experience Lexis+