Do real estate agents qualify for QBI?

When it comes to tax deductions, real estate professionals often wonder, "Do real estate agents qualify for QBI?" The Qualified Business Income (QBI) deduction, introduced under the Tax Cuts and Jobs Act (TCJA) of 2017, offers eligible business owners up to a 20% deduction on qualified income. But how does this apply to real estate agents? Let's dive in.

Understanding QBI for Real Estate Agents

The answer is: Yes, real estate agents can qualify for QBI, but certain conditions must be met. The IRS classifies real estate agents as "specified service trades or businesses" (SSTBs), which can complicate eligibility based on income thresholds.

Factors That Impact QBI Eligibility:

  • Type of Business Structure: Agents operating as sole proprietors, LLCs, or S-Corps are typically eligible.

  • Income Levels:

    • Full QBI deduction is available if taxable income is under $191,950 (single) or $383,900 (married filing jointly) for 2024.

    • Above these limits, the deduction phases out.

  • Nature of Services: The agent must be actively participating in real estate transactions and not merely an investor.

At L&Y Tax Advisor, we specialize in helping real estate professionals maximize their deductions while staying compliant with IRS rules. Our experts provide personalized tax strategies to ensure you claim every dollar you're entitled to under the QBI deduction.

Why Choose L&Y Tax Advisor?

  • Expert Knowledge of real estate tax law

  • Customized Strategies tailored to your business model

  • Year-Round Support to keep you prepared beyond tax season

FAQs

Q1: Do real estate agents qualify for QBI if they earn passive income?
 A: No, passive income generally doesn't qualify; you must be materially participating.

Q2: Can part-time real estate agents claim the QBI deduction?
 A: Yes, as long as they meet the income and business activity requirements.

Q3: How can L&Y Tax Advisor help real estate agents with QBI?
 A: We assess your business structure, optimize your deductions, and guide you through compliance, maximizing your QBI benefit.

Read More:
What is a Tax District

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