Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Important Changes This Year

Standard and Itemized Deductions

Deduction for Qualified Business Income

For taxable years beginning after December 31, 2017 and before January 1, 2026, there is a new deduction for pass through businesses. Sole proprietors are categorized as pass through businesses.

A sole proprietor may be able to deduct up to 20% of qualified business income (QBI). The calculations on Schedules C and SE are not affected by this deduction. Taxable income is not reduced below zero by the deduction. The deduction is limited for higher incomes and for specified service trades or businesses. Refer to the Volunteer Resource Guide and Publication 4491 for more information.

Vehicles driving on highway.