If I had to pick one broad tax break that many eligible owners should make sure they have evaluated, it would be the QBI deduction under Section 199A. The IRS says eligible owners of sole proprietorships, partnerships, S corporations, and some trusts and estates may be able to deduct up to 20% of qualified business income, plus 20% of certain REIT dividends and publicly traded partnership income. The IRS also notes that this deduction is figured on Form 8995 or 8995-A and that eligibility and limitations depend on taxable income, business type, W-2 wages, and qualified property.

 

Why this matters is that many small businesses are organized as pass-through entities, so this deduction can be very large in dollar terms. It does not apply to C corporation income, and not every owner will qualify for the full amount because the rules get more restrictive at higher income levels or for certain service businesses. But if someone is filing a Schedule C, receiving K-1 income from a partnership, or owning an S corporation, QBI is one of the first places worth checking. If QBI does not apply, other worthwhile IRS-listed areas to review are the home office deduction, standard mileage, business interest deduction, retirement plan startup credits, and other business credits and deductions.