Understanding the QBI Deduction: A Comprehensive Overview for Business Owners
The Qualified Business Income (QBI) Deduction, as explained by Sai CPA Services , offers substantial tax benefits for specific business entities. This deduction allows eligible taxpayers, including sole proprietorships, partnerships, S corporations, and certain trusts and estates, to claim up to 20% of their QBI, REIT dividends, and PTP income. The deduction is available for tax years beginning after December 31, 2017, and ending on or before December 31, 2025. The QBI deduction comprises two main components: QBI Component : Allows a 20% deduction on income from domestic businesses, subject to limitations based on taxable income, W-2 wages, and the unadjusted basis immediately after acquisition (UBIA) of qualified property. REIT/PTP Component : Offers a 20% deduction on qualified REIT dividends and PTP income, with different limitations not constrained by W-2 wages or UBIA. Qualified Business Income encompasses various forms of business income and deduction...