Sometimes small is better: Your small business may be eligible for tax breaks that aren’t available to large businesses. For example, the qualified business income (QBI) deduction is available to eligible individuals but not to C corporations or their shareholders. The deduction can be up to 20% of: 1) QBI earned from a sole proprietorship or single-member LLC treated as one for federal income tax purposes, plus 2) QBI passed through from a pass-through business, meaning a partnership, S corp or LLC classified as a partnership. Pass-through businesses report tax items to their owners, who then take them into account on their own returns. The rules are complex. Contact us with questions.
