{"id":194739,"date":"2019-07-11T08:03:35","date_gmt":"2019-07-11T15:03:35","guid":{"rendered":"https:\/\/www.nationalfunding.com\/blog\/?p=194739"},"modified":"2020-04-17T08:51:54","modified_gmt":"2020-04-17T15:51:54","slug":"small-business-tax-break","status":"publish","type":"post","link":"https:\/\/www.nationalfunding.com\/blog\/small-business-tax-break\/","title":{"rendered":"What Is Qualified Business Income?"},"content":{"rendered":"<p>There&#8217;s a new small business tax break that may lower the amount you pay Uncle Sam. The deduction for qualified business income, also known as the pass-through business income deduction, allows eligible business owners to deduct up to 20 percent of qualified income on their tax returns.<\/p>\n<p>Here&#8217;s a quick rundown on this tax law change and how it affects your small business.<\/p>\n<h2>What Is Qualified Business Income?<\/h2>\n<ul>\n<li>According to the <a href=\"https:\/\/www.irs.gov\/newsroom\/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-income-deduction-faqs\" target=\"_blank\" rel=\"noopener noreferrer\">IRS<\/a>, the qualified business income definition is &#8220;the net amount of qualified items of income, gain, deduction and loss from any qualified trade or business.&#8221; In other words, it&#8217;s your net business profit.<\/li>\n<li>Certain professional services, financial services and performing arts businesses earning more than $315,000 for a married couple filing a joint return, or $157,500 for all others, are ineligible for this small business tax break.<\/li>\n<\/ul>\n<h2>What Does &#8216;Pass-Through&#8217; Mean?<\/h2>\n<p>This term refers to business income &#8220;passing through&#8221; the business to the business owner, who pays individual income tax rates on the earnings.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" title=\"Male business owner reviews papers at his office desk\" src=\"https:\/\/www.nationalfunding.com\/blog\/wp-content\/uploads\/2019\/07\/keepingtrackofdeliveries_648570.jpg\" alt=\"Male business owner reviews his small business tax break\" width=\"500\" height=\"334\" \/><\/p>\n<h2>Does the Deduction Apply to All Business Structures?<\/h2>\n<ul>\n<li>Sole proprietorships, partnerships and S corporations qualify for this deduction.<\/li>\n<li>Income earned through a C corporation is not eligible.<\/li>\n<\/ul>\n<h2>How Do I Calculate My Deduction?<\/h2>\n<p>The 20 percent deduction will apply to the lesser of:<\/p>\n<ul>\n<li class=\"\">Your qualified business income<\/li>\n<li class=\"\">Your taxable income minus your net capital gains<\/li>\n<\/ul>\n<p>Check out our piece on how the <a href=\"https:\/\/www.nationalfunding.com\/blog\/how-do-the-2018-tax-changes-help-my-business\/\" target=\"_blank\" rel=\"noopener noreferrer\">2018 Tax Cuts and Jobs Act<\/a> affects your business to learn more about this small business tax break.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Determining your QBI could lead to a small business tax break. Let&#8217;s find out if you qualify.<\/p>\n","protected":false},"author":11,"featured_media":194738,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[65,115],"class_list":["post-194739","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-taxes-regulations","tag-tax-advice","tag-tax-deductions-for-small-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Does Your Business Qualify for This Small Business Tax Break?<\/title>\n<meta name=\"description\" content=\"Determining your QBI could lead to a small business tax break. 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