A deduction allowing eligible self-employed to deduct up to 20% of qualified business income.
The Qualified Business Income deduction, created by the 2017 Tax Cuts and Jobs Act, allows many sole proprietors, partnerships, and S-corps to deduct up to 20% of their qualified business income. This is taken as a below-the-line deduction, reducing taxable income but not AGI or SE tax.
Most self-employed individuals qualify, but specified service trades (law, health, consulting) face phase-outs starting at $182,100 single/$364,200 married (2024).
Up to 20% of your qualified business income. On $100,000 net profit, that's a potential $20,000 deduction, saving $4,000-7,000+ depending on your tax bracket.
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