Qualified Business Income deduction · Also called: Section 199A
A deduction of up to 20% of qualified business income for the self-employed and owners of pass-through businesses, limited at higher incomes and for specified service businesses.
The deduction reduces taxable income but not AGI, so it does not lower MAGI for Medicare or ACA purposes. It cannot exceed 20% of taxable income minus net capital gain.
Deductible retirement plan contributions and half of self-employment tax reduce qualified business income.