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What is a specified service trade or business (SSTB)?

Businesses or trades involved in the following service fields are considered a specified service trade or business for the purposes of claiming the QBI deduction:

  • Health
  • Law
  • Accounting
  • Actuarial science
  • Performing arts
  • Consulting
  • Athletics
  • Financial services
  • Brokerage services
  • Investing and investment management
  • Trading or dealing in securities
  • Partnership interests
  • Commodities

The IRS also identifies “any trade or business … [wherein] the principal asset is the reputation or skill of one or more of its employees or owners” as an SSTB in the instructions for Form 8995, Qualified Business Income Deduction Simplified Computation.

A taxpayer receiving income from an SSTB may claim all or a portion of QBI if that income is below the taxable income threshold or falls within the SSTB phase-in threshold range.

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