An Advisor’s Guide to the 20% Pass-Through Deduction

With the potential to reduce taxable income by up to 20%, the 199A Qualified Business Income (QBI) deduction has the potential to dramatically reduce a business owner’s tax liability year after year. Notably, while the deduction, which was first introduced available in 2018 as part of changes made by the Tax Cuts and Jobs Act (TCJA), was initially set to expire at the end of 2025, as a result of the November 2024 elections, the deduction is now likely to remain a part of the Tax Code for years to come. The good news is that the QBI deduction is a powerful tax-saving tool for many small business owners. The bad news is that it is also one of the most complex deductions, both from a calculation and a planning point of view. To empower advisors to help their clients make the most of the QBI deduction, this session will begin with a “ground up” overview of the QBI deduction, followed by a review of QBI-enhancing strategies. The ultimate goal is to leave attendees with a “rolodex” of QBI solutions that can be filtered by a client’s business type, taxable income, and other relevant factors.