Qualified Business Income (QBI)

Qualified Business Income (QBI) Under the OBBBA Update for Small Business Owners

What the OBBBA Changed and Why It Matters?

QBI is now permanent

The QBI deduction no longer expires after 2026. This creates long term stability, allowing owners to plan entity structure, compensation, and retirement contributions with clarity.

A wider income phase in window begins in 2026

The expanded QBI thresholds give more owners, including Specified Service Trades or Businesses (SSTBs), additional room before the deduction phases out. With a wider income range, income management becomes a powerful planning tool rather than a narrow cliff.

A Four Hundred Dollar ($400) Minimum Deduction for Microbusinesses

Owners who materially participate and report at least $1,000 of Qualified Business Income receive an automatic minimum QBI deduction. This ensures even the smallest pass-through operations benefit from the new law.

The Real Opportunity: How to Align Your Numbers to Maximize Your QBI Deduction

While the QBI deduction seems simple at first glance, the IRS calculation behind it creates both opportunities and hidden pitfalls. Owners who plan proactively around income, wages, and structure capture the largest benefit.

Taxable income management

Your taxable income determines whether you qualify for the full deduction, a reduced deduction, or no deduction at all. Strategic timing of expenses, retirement contributions, HSA contributions, and charitable giving can place your income in the optimal QBI range.

W-2 Wage Planning and Unadjusted Basis Immediately After Acquisition (UBIA)

For higher income owners, the QBI deduction may depend on whether your business pays sufficient W-2 wages or holds qualifying depreciable property. Many owners lose part of their deduction simply because their structure was not optimized for QBI.

S-Corporation Compensation Modeling

S-Corporation wages reduce QBI. Too high and your deduction shrinks. Too low and the IRS may question reasonable compensation. Finding the correct balance requires experience and precise modeling.

Aggregation and Rental Qualification

Combining entities can increase the QBI deduction by blending wage heavy and wage light businesses. Rental property owners may also qualify if their activity meets trade or business standards. These decisions must be evaluated carefully to meet IRS requirements.

Why a QBI Review Matters Now?

The OBBBA changes create new planning windows beginning in 2026. Waiting until tax season to adjust your income or structure can limit available options. A proactive review now gives you time to position your business before year end.

Most businesses do not need major restructuring. They need clarity, direction, and a plan that aligns with current IRS rules.

At Vulcan Tax, we translate these complex changes into clear decisions you can act on with confidence.

Request Your QBI Planning Review

If you want to understand exactly how the OBBBA affects your QBI deduction, complete the form below. Your review will identify:

Where your QBI deduction stands today.
Whether your income is at risk of reducing or eliminating the deduction.
What changes can increase your tax savings.
How to position your structure for the expanded 2026 rules.

A focused QBI planning conversation can uncover savings that continue for years.

Maximize Your QBI Deduction Under the OBBBA

Clarity, strategy, and measurable savings for pass through business owners.

The new OBBBA rules increase planning room and opportunity, but only if your structure and income strategy support the deduction. Request a detailed QBI review to understand how these changes apply to your business and what steps can improve your tax position.

Your tax strategy should work for you. Let us show you how.

Submit your business details so we can evaluate your structure, income range, and QBI opportunities under the updated OBBBA rules. This review identifies your current position and the strategic actions that can strengthen your tax outcome.

A few answers now can uncover savings for years ahead.

Request My QBI Review