ACTEC Trust & Estate Talk Qualified Business Income (QBI) Deductions Post-OBBBA
Sep 23, 2025
In this engaging discussion, Steve Gorin, an ACTEC Fellow and expert in trust and estate tax practices, unpacks the recent changes to the Qualified Business Income deduction following the One Big Beautiful Bill Act. He elaborates on how the new legislation expands phase-in ranges, creating fresh tax planning opportunities for pass-through business owners. Gorin also sheds light on income thresholds, the intricate wage limitation mechanics, and clarifies which professions are affected by the specified service trade exclusions.
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Two Core QBI Limitations
- The QBI deduction has two core limitations: a wage-based limit and a specified service trade or business (SSTB) disallowance.
- These limits shape who gets the full 20% deduction and when phase-ins or disallowance apply.
Calculate Wage Limitation Carefully
- Evaluate your business's W-2 wages and UBIA because the wage limitation can cap the QBI deduction.
- Use the greater of 50% of wages or 25% of wages plus 2.5% of UBIA when calculating the cap.
Who Counts As An Excluded Business
- The SSTB exclusion follows a specific list and excludes many professional fields from the QBI deduction at high incomes.
- Interestingly, engineers and architects were carved back in and now can qualify for the deduction.