QBI
Business & Finance abbreviation · Tax
| Stands for | Qualified business income |
|---|---|
| Categories | Business & Finance |
QBI stands for Qualified business income, a tax abbreviation.
Net income from a qualified pass-through business, such as a sole proprietorship, partnership or S corporation, that may support a deduction of up to 20% under section 199A. Above income thresholds, limits based on W-2 wages paid and the type of business can reduce or eliminate it.
Example: My Schedule C profit counts as QBI, so I get a 20% deduction on it.
Usage notes
Created by the 2017 tax law to give pass-through owners a break comparable to the cut in the corporate rate. Originally due to expire after 2025, it was made permanent by legislation in 2025. Specified service businesses such as law, medicine and consulting lose the deduction at higher incomes. It does not reduce AGI because it is taken after AGI is calculated.
Related abbreviations
More tax abbreviations
- PAN – Permanent Account Number
- PAYE – Pay As You Earn
- PST – Provincial sales tax
- PTC – Premium tax credit
- PTET – Pass-through entity tax
- PTIN – Preparer Tax Identification Number
- QCD – Qualified charitable distribution
- QOZ – Qualified Opportunity Zone
- QSBS – Qualified small business stock
- QSS – Qualifying surviving spouse
- QST – Quebec sales tax
- SALT – State and local taxes