Throughout the years, legislators have written numerous lines into the tax code to soften the blow of the extra costs that self-employed persons must shoulder as they do business. The Tax Cuts and Jobs Act (TCJA), passed in December 2017 and effective as of the 2018 tax year, made several changes to self-employed tax deductions. Many of these changes are temporary and set to expire in 2025, but others are permanent.
The law affects small businesses in many ways, particularly via a 20% qualified business income deduction for pass-through businesses—those that pay taxes through individual taxpayer(s) rather than through the corporation.
