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Tax Deductions

You don’t have to be a tax expert to know that deductions are a good thing. Deductions help reduce your income before your total tax liability is calculated. One important deduction that was added in the Tax Cuts and Jobs Act of 2017 was the Qualified Business Income (QBI) deduction. Eligible business owners can receive a deduction of up to 20% of QBI. That means you pay taxes on only 80% of your qualified business income! Of course, there are a few hoops to jump through. To qualify there are many restrictions that require a competent tax professional to analyze for you. 

So what can you do with this information? We recommend you review your tax return to see if you claimed the deduction (line 10 of the form 1040). Whether you did or didn't, there may be ways to increase your deductions and reduce your tax burden. One strategy may be to reclassify some of your income from the business. Another may be to actually accelerate income into the current year. 

There is a lot to consider with this, so if you are unsure if you qualify or want a second opinion, let our team of advisors and experienced professional network help. We can work with you and your tax professional to ensure your business is utilizing the available deductions and paying the least amount of taxes.

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