Curtis Randle-El is a Pittsburgh executive who leads The El Wealth Management Group and provides clients of high net worth with pathways toward tax advantaged asset management and retirement savings. Among the areas Curtis Randle-El has extensive knowledge in is using tax deductions designed to help business owners and entrepreneurs.
One such pathway is the Qualified Business Income Deduction (QBI Deduction), which is designed for pass-through entity owners. These sole proprietorships encompass independent contractors and entities such as limited liability companies, partnerships, and S corporations. The latter are set up such that the owners report their portion of the business income on personal income returns.
The QBI deduction can be as much as 20 percent of income from a pass-through entity that undertakes business or trade within the United States. It also encompasses qualified publicly traded partnership income and qualified real estate investment trust dividends. A personal write-off, it does not reduce business income, nor does it impact self-employment tax.
Calculating QBI is relatively complex, as there are a number of limitations in play beyond basic profit or loss. Among the elements not taken into account in calculating QBI are guaranteed payments to partners, and capital losses, gains, or dividends. In addition, QBI does not encompass the compensation paid to the owner-employee of an S corporation. With several other factors to consider, it makes sense to consult with an experienced professional when claiming a QBI deduction.
One such pathway is the Qualified Business Income Deduction (QBI Deduction), which is designed for pass-through entity owners. These sole proprietorships encompass independent contractors and entities such as limited liability companies, partnerships, and S corporations. The latter are set up such that the owners report their portion of the business income on personal income returns.
The QBI deduction can be as much as 20 percent of income from a pass-through entity that undertakes business or trade within the United States. It also encompasses qualified publicly traded partnership income and qualified real estate investment trust dividends. A personal write-off, it does not reduce business income, nor does it impact self-employment tax.
Calculating QBI is relatively complex, as there are a number of limitations in play beyond basic profit or loss. Among the elements not taken into account in calculating QBI are guaranteed payments to partners, and capital losses, gains, or dividends. In addition, QBI does not encompass the compensation paid to the owner-employee of an S corporation. With several other factors to consider, it makes sense to consult with an experienced professional when claiming a QBI deduction.
