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Qualified Business Income (QBI) Deduction for Stock?

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angelawaye:
https://www.irs.gov/newsroom/qualified-business-income-deduction

This might help clarify what it is. Hope it helps :)

Uncle Pete:

--- Quote from: angelawaye on January 29, 2021, 20:50 ---The QBI (Qualified Business Income Deduction) was apart of Trump's Tax breaks for small businesses. It wasn't available years ago so that is why I was worried the new admin might get rid of it. I didn't mean to get political so I'm sorry if I upset you. Hopefully you took advantage of it.

--- End quote ---

Not angry and I'm sick of negative politics and accusations, not you.  ;D

This deduction began in 2018 and is scheduled to last through 2025—that is, it will end on January 1, 2026 unless extended by Congress.

I still don't understand, as I pay someone who is up to date on the laws and trained and she's wonderful. I didn't know about this. I had to go read some more.

For tax purposes, what distinguishes these types of businesses is that they pay no taxes themselves. Instead, the profits (or losses) from such businesses are passed through the business and the owners pay tax on the money on their individual tax returns at their individual tax rates. The vast majority of smaller businesses are pass-through entities. Indeed, over 86% of businesses without employees are sole proprietorships.

https://www.nolo.com/legal-encyclopedia/the-new-pass-through-tax-deduction.html

Unfortunatly, what looked potentially like good news, on the surface:  The Tax Policy Center (TPC) estimated that the bottom 80% of taxpayers (income under $149,400) would receive 35% of the benefit in 2018, 34% in 2025 and none of the benefit in 2027, with some groups incurring costs. TPC also estimated 72% of taxpayers would be adversely impacted in 2019 and beyond, if the tax cuts are paid for by spending cuts separate from the legislation, as most spending cuts would impact lower- to middle-income taxpayers and outweigh the benefits from the tax cuts

IF? So many we're better off not having Cheeto Man in charge and making budget cuts? I really don't know. I'm not going to take sides when what we think or say, makes no difference to the people in power. They give us a tax cut that isn't, but sounds nice and has a pretty name? Deduction

I'll hand the papers to the smart lady, she does all the complicated forms and "ciphering" gets the taxes filed, and she mails back everything. Refund is auto deposit. I'm happy to not have to deal with this personally anymore. Last time I used turbotax I owed more than the accountant costs a year. She's one of my favorite people, once a year.  8)

Anyway, schedule C is our friend.

Sean Locke Photography:
It’s a hood thing for any business owner.  Your business profits get reported on your personal return.  So, instead of getting taxed on $100k, you get taxed on $80k because to the 20% deduction.

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