Do the Right Thing & Save 20%

By Ben Kinsey

Image courtesy of wikimedia

For all active business entities in the US that are not rental properties or hobbies, there is a new 20% business deduction that applies to your overflow income. (This is your income minus your salary) Salary, in this case, is important since the only way you can take the 20% deduction is if you take a salary, or in the case of a partnership, a guaranteed payment.  The term the IRS uses to describe this is Qualified Business Income.