• TCJA introduced a new but temporary deduction for pass-through businesses which allows a deduction of 20 % of qualified business income – often referred to as the QBI deduction :
The intent of this deduction was to lower the effective top individual tax rate on business income from 37 percent to 29.6 percent as the tax rate for businesses structured as pass-through entities will be almost double the C-corporation tax rate of 21 %
The QBI deduction is subject to taxable income thresholds and deductible loss limitations , with more specific income limitations for personal service firms
This provision will expire in 2026 absent a tax law change