What is Qualified Business Income?
Category: Business
1Definition
Income from pass-through businesses (S corps, partnerships, sole proprietorships) that may qualify for a 20% tax deduction.
2Context
Created by the 2017 tax law. Can significantly reduce taxes for business owners meeting income and business type requirements.
3Example
A freelance consultant earning $150,000 might deduct $30,000 as QBI, saving roughly $7,000 in taxes.
⚠Common Trap
Not all business income qualifies—certain service businesses and high earners face limits or exclusions.
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