Some business owners got welcome news with the One, Big, Beautiful Bill Act (OBBBA). The new law makes the qualified business income (QBI) deduction permanent and enhances it. (The 20% deduction was set to expire after 2025.) Certain limits reduce or eliminate the deduction based on taxpayer income. For 2025, the ranges over which these limits phase in are $394,600 to $494,600 for joint filers and $197,300 to $247,300 for other filers. Beginning in 2026, these ranges will widen, allowing larger QBI deductions for some taxpayers. The law also introduces a minimum $400 deduction in 2026 for taxpayers with at least $1,000 of QBI from a qualified business they “materially participate” in.
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