The One Big Beautiful Bill Act, enacted on July 4, 2025 as Public Law 119-21, introduced a wide range of changes that will impact tax returns for the 2025 tax year and beyond.
The section 199A Qualified Business Income Deduction was set to expire after the 2025 tax year. The OBBB makes section199A permanent with no change to the 20% QBID percentage.
Starting in 2026, the limitation phase-in window for Specified Service Businesses has been expanded from $50,000 to $75,000 for single filers and from $100,000 to $150,000 for married filing jointly.
Starting in 2026, taxpayers will get a minimum deduction of $400 if they materially participate in businesses that have at least $1,000 in income. Both amounts will be increased in $5 increments based on changes to the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) in subsequent years.
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