Qualified Business Income Deduction Under The One Big Beautiful Bill

On July 4, 2025, President Trump signed the One Big Beautiful Bill into law. The legislation makes far-reaching changes to the federal tax code and other parts of the government. The bill cuts certain taxes, changes funding for a number of federal programs, raises the debt ceiling by $5 trillion, and extends many of the provisions originally introduced in the 2017 Tax Cuts and Jobs Act (TCJA).

Qualified Business Income (“QBI”)

Business owners have been able to take a 20% deduction against their qualified business income since 2017. Under prior law, that deduction was scheduled to end with the 2025 tax year. The One Big Beautiful Bill made the QBI deduction permanent. It also liberalized the calculations of the phaseouts for specified service trade or businesses and the wage and investment limitations. The phaseouts now begin at $75,000 ($150,000 for married joint) of taxable income rather than the $50,000 ($100,000 for married joint) in prior law.

The bill also sets a minimum QBI deduction of $400 for any taxpayer who has at least $1,000 of qualified business income from businesses with active participation. This new provision will allow a small deduction for some individuals who were previously phased out of the deduction.

Contact Us

With major changes to tax rules, both individuals and business owners are encouraged to revisit tax strategies. A proactive approach will be essential to capture benefits, manage risk, and stay compliant as the new provisions take effect. If you have questions about the information outlined above, or need assistance with another tax issue, WhippleWood CPAs can help. For additional information call 303-989-7600 or click here to contact us. We look forward to speaking with you soon.