Business Owners Benefit from OBBBA: Bigger, Permanent QBI Deductions!

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.