irsMost attorneys, accountants, and other professionals operate as unincorporated sole practitioners, or through partnerships and limited liability partnerships (LLP), making them owners of pass-through entities. Such professionals may be able to cut the effective tax rate on the income from their practices through the use of the qualified business income (QBI) deduction [Internal Revenue Code (IRC) section 199A]. This deduction, which was created by the Tax Cuts and Jobs Act of 2017 (TCJA), is up to 20% of QBI, but limitations and other rules can limit or prevent any write-off. This article discusses some key issues related to the QBI deduction for professionals in light of recently proposed regulations (REG-107892-18, 8/8/18).


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