2020 – 01/03 Owners of passthrough businesses who meet certain requirements may be eligible for a generous deduction, if they’re current on their tax filing. The deduction equals up to 20% of the owner’s share of qualified business income (QBI). In one case, the deduction was denied because the owner hadn’t filed a tax return. The IRS independently prepared a substitute return for the taxpayer for that year. Based on a recent IRS memo to its examiners, the QBI deduction can’t be taken on a substitute return, because the deduction is subject to several limitations. The deduction may later be allowed if the taxpayer files a delinquent return and the requirements are met. Here’s more:

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