Oh man, taxes. Does anyone ever really get them? I swear they’re like some kind of dark magic — one minute you think you’ve got it, then poof, confusion! So, let’s chat about Qualified Business Income, or QBI. I mean, what a term, right? Sounds fancy, but it’s basically a tax deduction thing for what’s called pass-through businesses. If you own an S-corp, partnership, or doing the whole gig economy hustle, you might be in luck. Even some trusts and estates get in on this. Freelancers, unite!
But oh boy, here’s the kicker — for 2025, single folks earning $197,300 and couples hitting $394,600 start seeing this break fade away. Can disappear altogether, depending on a few factors. Pretty wild, huh? And according to the IRS, around 25.6 million folks claimed this deduction in 2022, which is a jump from the 18.7 million back in 2018. Imagine that!
Now, some controversy bubbles up because, apparently, this deduction mostly helps people with hefty incomes. Erica York from the Tax Foundation told me that. Not sure why I remember her comment, but it stuck. She says it’s not your regular W-2 workers benefiting here — we’re talking about business owners who pocket profits through individual returns. Makes you think, doesn’t it?
Okay, let’s rewind a bit. So right now, if you’re a doc, lawyer, or in another fancy white-collar gig, and you earn above certain limits, no QBI deduction for you. But wait, some changes might be brewing in the House. Heard it from Ben Henry-Moreland — yeah, he’s with Kitces.com and all. They’re thinking of tweaking how phaseouts are calculated, which could mean bigger breaks for specific high earners. Just when you thought you had it down, right?
Chye-Ching Huang over at NYU’s Tax Law Center says these changes might be gold for higher-income folks, especially lawyers and lobbyists. Who knew? Anyway, it’s all razzle-dazzle to me, but hey, maybe you’ll find that tidbit useful next April or whenever. Or not. Who knows what’s next in the saga of tax laws!
