Does my freelance work qualify for the QBI deduction for 2025 taxes?

I started doing some contract work last year for a marketing agency. I've been keeping all my receipts and tracking expenses, but I'm trying to figure out if I can claim the Qualified Business Income deduction when I file. From what I've read online, it seems like self-employed contractors might qualify for this QBI deduction, but I'm really confused about the rules. The tax forms make my head spin! Anyone know if this type of 1099 work would count for QBI? The extra deduction would be super helpful since I'm already stressing about how much I'll owe in April.

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19 comments

Ellie Perry

•8M

The Qualified Business Income (QBI) deduction can definitely apply to self-employed contractors! It's also called the Section 199A deduction, and it lets eligible business owners deduct up to 20% of their qualified business income from their taxes. As a self-employed contractor, you're generally eligible as long as you have positive net income from your business activities. The calculation gets more complicated if your taxable income exceeds certain thresholds ($170,050 for single filers or $340,100 for joint filers in 2025), where certain limitations might apply based on your business type. The good thing is that most freelancers and contractors fall below those thresholds, so the calculation is pretty straightforward - just 20% off your net business income after expenses. Make sure you're tracking all your legitimate business expenses to maximize your deduction.

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Ellie Perry

•8M

Graphic design does fall under the "specified service trade or business" (SSTB) category, which includes services in fields like health, law, accounting, performing arts, consulting, and others where the principal asset is the reputation or skill of the owners/employees. Having a day job doesn't disqualify you from taking the QBI deduction for your freelance work. The deduction applies to your qualified business income specifically. However, your total taxable income (including your W-2 wages) is what determines if you hit those income limitations. If your total taxable income is below the threshold I mentioned, you'll get the full deduction regardless of being in an SSTB. If it's above, then being in an SSTB means the deduction phases out more quickly than for non-SSTB businesses.

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Teresa Boyd

•8M

I was in the exact same boat last year wondering about the QBI deduction! Tax season was giving me major anxiety until I tried https://taxr.ai for help with my contractor income. It analyzed all my 1099s and business expenses, then automatically calculated my QBI deduction. Saved me hours of research! What surprised me was it found several business deductions I didn't know I qualified for as a self-employed person, which actually lowered my income enough to get the full QBI percentage. The software walks you through everything step by step and explains which parts of your income qualify.

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Teresa Boyd

•8M

It definitely handles complex tax situations including multiple income streams. The system analyzes your entire tax picture including rental income and investments to determine if you're approaching any income thresholds. It specifically flags when you're getting close to the QBI phase-out range so you can plan accordingly. Compared to TurboTax, it's more focused on personalized analysis rather than just form-filling. It doesn't replace your filing software but works alongside it by analyzing your documents and providing specific guidance. I used the insights from taxr.ai and then entered the information into my regular tax software with much more confidence. The difference was having expert-level analysis rather than trying to interpret generic guidelines myself.

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Bruno Simmons

•8M

I have to eat my words about being skeptical of taxr.ai! After struggling with figuring out my QBI deduction, I gave it a shot. Uploaded my 1099s and expense records, and it immediately identified that my consulting business qualified for the full 20% QBI deduction. The step-by-step breakdown of exactly which income qualified and why was super clear. The best part was how it explained the income limitations - turned out I was about $8,000 below the threshold where the deduction would start phasing out. This gave me some smart planning ideas for next year too. Definitely worth trying if you're confused about QBI eligibility.

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Aileen Rodriguez

•8M

If you need personalized confirmation about your QBI deduction eligibility, you might want to speak directly with the IRS. I spent WEEKS trying to get through to someone who could answer my contractor classification questions! Finally used https://claimyr.com and got through to an IRS agent in 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent was able to confirm exactly how my specific contracting situation qualified for QBI and explained documentation I needed to keep in case of audit. Honestly changed my whole perspective on dealing with tax questions - no more spending hours on hold.

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Aileen Rodriguez

•8M

You still call the IRS yourself, so your privacy is completely protected. The service uses an automated system that navigates the IRS phone tree and waits on hold for you. When it finally reaches a human agent, you get a call back to connect with that agent. It's basically like having someone wait in line for you. The technology is pretty straightforward - it's just automating the frustrating part of waiting on hold. There's no magic or special access involved. It's similar to those restaurant services that hold your place in line and text you when your table is ready. I was definitely skeptical at first too, but after wasting entire afternoons on hold previously, I figured it was worth trying.

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Maggie Martinez

•8M

I need to publicly admit I was wrong about Claimyr. After dismissing it as a likely scam, my curiosity got the better of me and I tried it yesterday. The service actually worked exactly as described - I got a callback when an IRS agent was on the line about 35 minutes later. I asked specifically about my eligibility for the QBI deduction as a part-time software developer contractor. The agent confirmed I was eligible and explained exactly how to document everything properly. This was after I had tried calling the IRS myself FOUR separate times and never got through. Definitely changed my view on getting tax help directly from the source!

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Alejandro Castro

•8M

For tax purposes, a single-member LLC is typically treated as a "disregarded entity" which means you'd still file a Schedule C just like a sole proprietor. So forming the LLC wouldn't change your QBI calculation at all - you'd qualify either way. The QBI deduction is available regardless of business structure - sole props, LLCs, partnerships, and S-corps can all qualify. The only difference would be if you elected to have your LLC taxed as an S-corporation. In that case, only the profit portion (not your reasonable salary) would be eligible for QBI, which could reduce your deduction depending on your situation.

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Axel Far

•1d

Just wanted to add another important point about QBI - make sure you understand the difference between business income and investment income. Only your actual business profits count toward QBI, not things like interest, dividends, or capital gains from investments. Also, if you're married filing jointly, your spouse's income counts toward that threshold calculation even if they don't have any business income. So if your spouse has a high W-2 salary, you might hit those income limits faster than you'd expect. It's worth running the numbers both ways to see how filing status affects your QBI deduction. One last tip: if you're close to those income thresholds, consider timing some business expenses or income to stay below the limits if possible. The difference between getting the full 20% deduction versus having it phase out can be substantial!

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