WEST PALM BEACH, Fla., Jun 12, 2023 (SEND2PRESS NEWSWIRE) -- Tax Help MD helps self-employed individuals and small businesses to resolve tax issues. From basic tax filings to more complex situations, Tax Help MD wants its clients to come out on top. That's why it empowers them with information, so they can get the best tax benefits available.
"For example, many businesses are not aware that the qualified business income deduction (QBI) is a tax deduction that allows eligible, self-employed and small-business owners to deduct up to 20 percent of their qualified business income on their taxes," Ekaterina Drouin, president, Tax Help MD says.
Here, Tax Help MD lists the five steps small corporations need to follow to accurately calculate QBI:
1 - Identify eligible business activities: Determine which activities conducted by the small corporation qualify for the QBI deduction. Generally, most trades or businesses other than specified service trades or businesses (SSTBs) are eligible. SSTBs include professions such as law, accounting, healthcare, consulting, financial services and others.
2 - Calculate the QBI for each eligible business activity: For each eligible business activity, calculate the QBI separately. The QBI is generally the net income or loss from the activity, excluding certain items such as capital gains or losses, dividends and interest income.
3 - Consider limitations and thresholds: QBI calculations may be subject to various limitations and thresholds. One such limitation is the taxable income threshold, which can affect the availability and amount of the QBI deduction. For tax years beginning in 2021, the threshold is $329,800 for married filing jointly or $164,925 for individual taxpayers.
4 - Apply W-2 wage and qualified property limitations (if applicable): For certain businesses, there are additional limitations based on W-2 wages and qualified property. If the small corporation is subject to these limitations, calculate the allowable QBI deduction based on a combination of the QBI, W-2 wages paid by the business and the unadjusted basis of qualified property used in the business.
5 - Determine the QBI deduction: Once the QBI is calculated for each eligible business activity and relevant limitations are applied, then the overall QBI deduction for the small corporation can be determined. The QBI deduction is generally a percentage (up to 20 percent) of the total QBI from all eligible activities.
Tax Help MD staff warns that it's important to note that tax laws and regulations are subject to change, and there may be additional considerations and complexities involved in calculating QBI for small corporations. Therefore, consulting with a qualified tax professional or accountant who is familiar with specific circumstances is highly recommended to ensure accurate and compliant calculations.
"We're a small business - just like many of our clients - so we're intimately familiar with their situations and how to help them achieve the best outcomes possible," Drouin says.
About Tax Help MD:
In business since 2012, Tax Help MD is a results-driven, full-service tax resolution organization which specializes in helping taxpayers get free of the stress and strain of tax debt. It has a CPA and tax attorney on staff and will help to set up IRs payment plans as needed too.
FOR MORE INFORMATION:
Tax Help MD: https://www.taxhelpmd.com/
News Source: Tax Help MD Inc.
Related link: https://www.taxhelpmd.com/
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