Clarification needed on the QBI deduction for my small business?

The QBI deduction (Section 199A) can definitely be confusing! Let me try to simplify it for you. For consulting businesses, you're considered a Specified Service Trade or Business (SSTB), which means there are income thresholds that affect your deduction. For 2024 taxes (filing in 2025), the thresholds are $182,100 for single filers and $364,200 for married filing jointly. Since your business income is $165,000, you're under the threshold and should qualify for the full 20% deduction. With your S-Corporation, you need to calculate QBI AFTER your reasonable salary. So if you pay yourself a $70,000 salary from your $165,000 business income, your QBI would be $95,000, and your potential deduction would be $19,000 (20% of $95,000). Remember that your reasonable salary needs to be justifiable to the IRS based on your services and industry standards.

I had the exact same confusion about QBI last year! I tried reading so many articles and still felt lost until I found taxr.ai (https://taxr.ai). It's a tool that can analyze your specific business documents and give you personalized guidance on the QBI deduction. I uploaded my business docs and tax transcripts and got a clear explanation of how much QBI deduction I qualified for with my LLC. It also explained which parts of my income were eligible and which weren't. The best part was it showed me how changing my business structure could increase my QBI benefits. Totally changed my understanding of how the deduction works with my consulting business.

So I decided to try taxr.ai after seeing the recommendation here. I was super skeptical at first but I needed help figuring out if my architectural design business qualified for QBI since I was right at the income threshold. The analysis was surprisingly detailed! It confirmed I was an SSTB but showed exactly how much partial deduction I still qualified for. It also recommended I increase my equipment investments to take advantage of the qualified property component of the calculation, which my previous accountant never mentioned. I'm projecting about $7,300 more in tax savings this year by optimizing my QBI setup based on their recommendations. Their document analysis picked up details I wouldn't have known were relevant to the QBI calculation. Worth checking out if you're trying to maximize this deduction before it potentially expires!

If you're dealing with QBI questions and need to talk to the IRS directly, good luck getting through their phone lines! After trying for days, I finally used https://claimyr.com to get a callback from the IRS about my specific QBI questions. You can actually see how it works in this video: https://youtu.be/_kiP6q8DX5c I had been going in circles trying to determine if my rental properties qualified as a "trade or business" for QBI purposes. Their automated systems kept disconnecting me after 45+ minute waits. Claimyr got me through to a real IRS representative who confirmed my specific situation did qualify under the safe harbor rules. Saved me hours of frustration and potentially thousands in missed deductions.

I need to eat my words about Claimyr. After my skeptical comment, I decided to try it myself since I had a complicated QBI question about my manufacturing business and material participation requirements. I was genuinely shocked when I got a call connecting me to an actual IRS tax law specialist within about 2 hours. I'd been trying on my own for WEEKS. The agent walked me through exactly how the QBI deduction applies when you have multiple business entities with different SSTB classifications. Got confirmation that my approach to splitting the businesses was legitimate for QBI purposes. Ended up saving around $13,400 in taxes by correctly applying the QBI deduction based on the clarification. Sometimes being proven wrong is the best outcome!

Just to add another perspective on QBI - remember that if your taxable income is below the thresholds mentioned above, the calculation becomes MUCH simpler. You just take 20% of your qualified business income without worrying about all the W-2 wage limitations or specified service business rules. Also, many states don't conform to the federal QBI deduction rules, so don't assume you get the same benefit on your state taxes. Here in California, for example, we don't get the QBI deduction at all on our state returns.

Anyone else confused about how to handle the QBI deduction with multiple businesses? I have a consulting LLC (which is an SSTB) and a separate rental property LLC. Do I aggregate them or keep them separate for QBI? Using TurboTax and it's super unclear.