QUALIFIED BUSINESS INCOME DEDUCTION (QBID)

General information:

• What it is: The Qualified Business Income (QBI) deduction, often called the Section 199A deduction, allows eligible taxpayers to deduct up to 20% of their qualified business income from a passthrough business (sole proprietorship, partnership, S corporation, certain trusts, and estates).
• Purpose: Enacted as part of the Tax Cuts and Jobs Act (TCJA) of 2017, its primary purpose was to provide tax relief to owners of pass-through businesses, aiming to somewhat level the playing field after the significant reduction in the corporate tax rate (from 35% to 21%).