How the TCJA Changed Pass-Through Deductions for Small Business Owners

In this episode of The Tax Strategy Podcast, Lucas and Luna break down the Qualified Business Income (QBI) deduction under Section 199A, which was introduced by the Tax Cuts and Jobs Act of 2017. They explain how this deduction allows pass-through business owners to deduct up to 20% of their qualified business income, but highlight the complex phase-out rules for specified service trades or businesses like law, medicine, and consulting. Using a concrete example of a solo pediatrician earning $250,000 in taxable income, they walk through the calculation, including how wage and property limits affect the deduction. Lucas also reveals that many eligible business owners fail to claim the QBI deduction due to lack of awareness, citing IRS data showing over $30 billion in forgone deductions annually. The hosts discuss recent proposals to modify the deduction as it is set to expire after 2025, and offer practical advice on how to maximize the benefit before potential sunset. This episode provides a clear, actionable guide for small business owners and self-employed professionals looking to reduce their tax liability. #QBI #Section199A #TCJA #PassThroughDeduction #SmallBusiness #TaxDeductions #SelfEmployed #Pediatrician #IRS #TaxPlanning #BusinessIncome #SpecifiedServiceTrade #WageLimit #Sunset #TaxCutsAndJobsAct #Finance #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo