The Treasury Department and the IRS issued final regulations and three related pieces of guidance implementing the new qualified business income (QBI) deduction, otherwise known as the 20 percent pass-through deduction.
The QBI deduction, created by the Tax Cuts and Jobs Act (section 199A), allows owners of sole proprietorships, partnerships, S corporations, trusts or estates to deduct up to 20 percent of their qualified business income. It is available for tax years beginning after Dec. 31, 2017, making this year the first time to claim the new deduction on the 2018 Form 1040.