The QBI deduction rules are complicated. One of the newest planning issues to consider deals with a possible QBI deduction-reduction effect on retirement plan contributions that could impact how small business owners save for retirement.
To help make the conversation with clients easier, we have created the “Will The Deductibility Of My Retirement Plan Contributions Be Impacted By The QBI Rules?” flowchart. This particular flowchart was developed in collaboration with Jeff Levine and based on the recent Nerd’s Eye View article he wrote covering this topic. This flowchart considers the following:
- Key QBI deduction eligibility guidelines
- QBI deduction income thresholds
Positiveimpact of lower AGI
- Roth 401(k) vs pre-tax 401(k) decision points
- Mega Backdoor Roth IRA consideration
This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.