The QBI Deduction Is Now Permanent: What Business Owners Need to Know

23 Oct 2025 The QBI Deduction Is Now Permanent: What Business Owners Need to Know

The most significant tax development for business owners just became even better. The One, Big, Beautiful Bill Act has made the Qualified Business Income (QBI) deduction permanent, eliminating the previous December 31, 2025 expiration date. This powerful benefit allows eligible business owners—including sole proprietors, partnership owners, S corporation shareholders, and qualifying LLC members—to deduct up to 20% of their qualified business income, potentially saving thousands in taxes annually.

Understanding Income Limits and New Enhancements

The QBI deduction becomes subject to limitations when taxable income exceeds $197,300 for single filers or $394,600 for joint filers in 2025. Above these thresholds, the deduction may be limited based on W-2 wages paid or qualified property owned by the business. Additionally, most professional service businesses face restrictions that can reduce or eliminate the deduction. However, the One, Big, Beautiful Bill Act introduces significant improvements starting in 2026, including expanded phase-out ranges and a new $400 minimum deduction for active business participants.

Strategic Planning for Maximum Benefits

With the QBI deduction now permanent and enhanced, business owners should develop comprehensive strategies to maximize their benefits. This includes carefully timing income and expenses, considering business structure decisions, and strategic planning around employee compensation and property acquisitions. The complex calculations and interactions with other tax provisions make professional guidance essential for optimizing these benefits while ensuring full compliance.

Expert Guidance for Your QBI Strategy

At Haynie, our tax professionals stay up to date on QBI developments and help business owners maximize every available benefit. With 12 offices across 5 states and recognition as a Top 100 accounting firm, we offer the expertise you need to optimize your tax strategy.

Contact us today to discuss how the permanent QBI deduction can impact your specific situation and ensure you’re positioned to maximize these long-term tax planning opportunities.