Big Changes Proposed for the QBI Deduction — Here’s What Business Owners Need to Know
The newly proposed “One, Big, Beautiful Bill” could bring game-changing updates to the Qualified Business Income (QBI) deduction—one of the most valuable tax breaks for pass-through entities like S corps, partnerships, and sole proprietorships.
Here’s a breakdown of what’s being proposed:
🔹 Permanent Extension:
No more planning around the QBI deduction’s scheduled sunset in 2025. This bill would make the 199A deduction permanent, giving businesses long-term planning certainty.
🔹 Bigger Deduction:
The current 20% deduction on qualified business income would increase to 23%—a 15% relative increase in tax savings potential.
🔹 Loosened Limitations for High Earners:
One of the biggest pain points with QBI has been income phaseouts. This bill proposes a 75% reduction in the application of limitation thresholds, making it significantly easier for high-income business owners (especially in specified service trades) to qualify.
🔹 Inflation Adjustment Reset:
Instead of basing inflation adjustments on 2018 dollars, the bill resets the benchmark year to 2025. This could allow for larger deductions over time, as the thresholds and amounts will grow from a higher base.
📊 What does this mean in dollars?
A business owner with $500,000 in qualified business income could see $115,000 deducted instead of $100,000—translating to an extra $15,000 in tax savings each year.

🌟 Bottom line: If passed, these QBI changes could represent one of the most business-friendly tax reforms in years, offering more predictability, flexibility, and savings.
Now is the time to review entity structure, revisit income strategies, and get proactive about your long-term tax plan.
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Disclaimer: This content is provided for educational purposes only and is not legal, tax, accounting, or financial advice. Every situation is unique, so consult your own attorney, CPA, or financial advisor before making decisions based on this information.