Tax

Qualified Business Income Deduction Can Save You up to 20 Percent

A powerful tax break for small business owners just got permanent. Here’s what to know.
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Qualified Business Income Deduction Can Save You up to 20 Percent
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Anne Johnson
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Introduced by the 2017 Tax Cuts and Jobs Act (TCJA), the qualified business income (QBI) deduction benefited owners of pass-through businesses. These include sole proprietorships, partnerships, limited liability companies (LLCs), and S corporations.

The deduction is subject to several limitations, but, overall, it allows taxpayers to deduct up to 20 percent of their qualified business income. But what businesses are qualified to take this deduction?

Qualified Business Income Deduction Components

The QBI, also known as the 199A deduction, was set to sunset in December 2025, but the One Big Beautiful Bill Act (OBBB) made the deduction permanent.
Anne Johnson
Anne Johnson
Author
Anne Johnson was a commercial property and casualty insurance agent for nine years. She was also licensed in health and life insurance. She went on to own an advertising agency, where she worked with businesses. She has been writing about personal finance for 10 years.