Currently, eligible small business owners may be able to claim a tax deduction based on their qualified business income (QBI) and certain other income. The deduction can be for up to 20% of their QBI, subject to limits as income rises. Eligibility begins to phase out at $394,600 for married joint filers and $197,300 for all other taxpayers. This deduction was part of the Tax Cuts and Jobs Act and is set to expire after 2025. Now, it’s part of The One, Big, Beautiful Bill, which passed the U.S. House and is now being considered by the Senate. If the bill is enacted, the QBI deduction would be made permanent and increased to 23%.
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