For seven years our practice has organized December conversations around a single question: would §199A survive? On July 4, 2025, the One Big Beautiful Bill Act (P.L. 119-21) answered it. ¹ The 20% qualified business income deduction is now permanent, the phase-in ranges are wider, and a new $400 floor takes effect in 2026. The rate did not move to 23%, the House proposal to lift it died in conference, and the W-2 wage and UBIA limitations remain unchanged.
For our pass-through clients in Charlotte, this is the most consequential structural certainty since the Tax Cuts and Jobs Act itself. We have lived through the "QBI cliff" planning era. Every fourth quarter we ran scenarios for specified service trade or business (SSTB) owners, physicians, attorneys, consultants, financial advisors, pushing taxable income down to fit under the upper threshold so they could capture a partial deduction.
Section 70105 of the Act, which amended IRC §199A(d)(3) and §199A(b)(3)(B) ², has not eliminated those conversations, but it has materially widened them.
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