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Employee Writer
posted Mar 27, 2018 10:26:26 AM

What is the 20% deduction for self-employed filers?

There is a 20% deduction on all qualified business income. The taxpayer’s qualified business income is the net amount of income and deductions for their trade or business.

Qualified business income includes income from:

  • Services
  • Rental real estate

Sole proprietorships and pass-through income from partnerships, S-corporations, estates and trusts qualify for this deduction. C corporations don’t qualify.

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1 Replies
Level 15
Jul 17, 2019 5:50:25 PM

Basically, ( and I do mean *basically*) it allows you to exclude "up to" 20% of your net *taxable* business income from being taxed. Not all businesses will qualify for it either.