In general, for Tax Year 2021, the de minimis safe harbor election allows taxpayers with business or investment property income to claim an automatic deduction for property costing:

$500 or less per item.

$1,000 or less per item.

$2,000 or less per item.

$2,500 or less per item.

Channing is self-employed as a professional video gamer. He will use the single filing status, and he has net business income of $59,259. The deductible part of his self-employment tax is $4,187. His taxable income, without regard to any amount he may be eligible to deduct for the qualified business income deduction, is $42,522. He did not have any employees nor any assets or property to depreciate.

Channing is eligible to receive a qualified business income (QBI) deduction of:

$0

$8,504

11,104

$11,852