Tax Updates and a Call to Action: Protecting QBID

In the ever-evolving world of taxes and deductions, it’s crucial to stay informed about the latest changes and opportunities that could impact your financial well-being. In this blog post, we’ll explore two significant updates: the Qualified Business Income Deduction (QBID) and the recent IRS inflation adjustments. Plus, we’ll shed light on a vital petition aimed at extending the QBID tax cut.

QBID: A Tax Cut with a Sunset Clause

The Qualified Business Income Deduction (QBID) is a tax cut that emerged as part of the 2018 Tax Cut and Jobs Act. While it may seem complex due to its phase-outs and limitations, at its core, it offers a 20% deduction applied to the net profit of Schedule C or pass-through businesses. This deduction effectively reduces taxable income by 20%, providing essential relief to small businesses and entrepreneurs.

The QBID was introduced to level the playing field, allowing these businesses to benefit from a tax break similar to the significant reduction in corporate tax rates from 35% to 21%. However, here’s the catch: QBID is set to sunset in 2025, which means its benefits will diminish unless action is taken.

NFIB’s Petition to Extend QBID

The National Federation of Independent Business (NFIB) is actively lobbying to extend the QBID tax break beyond its 2025 expiration date. Currently, they have gathered over 25,000 signatures on a petition supporting this cause. If you believe in the importance of QBID and want to ensure its continuation, you can add your voice to this crucial effort.

The IRS regularly updates various tax-related figures to account for changes in the economy and inflation. These annual adjustments impact different aspects of your financial planning. Here are some notable adjustments for 2024:

• Standard Deduction: For Married Filing Jointly, it rises to $29,200; for Filing Single, to $14,600; and for Head of Household, to $21,900.
• Estate Tax Exclusion: This figure has increased from $12,920,000 to $13,610,000, offering a bit of relief for those navigating estate planning.
• Monthly Parking Benefit: If you receive parking as a fringe benefit, note that the annual limit has risen from $300 to $315.
• Annual Gift Exclusion: The annual gift exclusion has gone up to $18,000 from $17,000. This is the amount you can gift to an individual in a year without it affecting your Estate Tax exclusion.
• Foreign Earned Income Exclusion: If you earn income abroad, you’ll be pleased to know that the exclusion has increased from $120,000 to $126,500.

Staying informed about these adjustments is vital for your financial planning and ensuring compliance with tax regulations.

Take Action: Support the QBID Extension

As tax regulations evolve, it’s crucial to keep an eye on opportunities that can benefit your financial future. The QBID is one such opportunity, and its potential expiration in 2025 is a cause for concern. Join the NFIB’s petition with over 25,000 signatures and contribute to the effort to extend this valuable tax break. Your voice matters in shaping the future of taxation for small businesses and entrepreneurs.

In conclusion, staying informed and taking action on tax-related matters is an essential part of securing your financial well-being. Explore these updates, be aware of the IRS inflation adjustments, and consider supporting the extension of QBID to ensure a brighter financial future for all.