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Business & farm
Those eligible for the QBI deduction can subtract 20% of the "net income" of the business from their taxable income. So, it can be an attractive deduction.
The IRS imposed the "can switch from W-2 to 1099 for same work" rule to prevent bona fide employees from declaring themselves independent contractors solely to take advantage of the 20% reduction in income. See the section of the IRS Instructions for Form 8995 at this link for the specifics about the "W-2 .... That exclusion is in place for three years, but you can rebut it if you provide records proving your status as an independent contractor.
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May 15, 2020
2:13 PM