Alhassane Diallo | Dec 08 2025 15:00
Year-End QBI Planning: What’s New for 2025 and How to Maximize Your Deduction
If you’re a business owner, you already know the Qualified Business Income (QBI) deduction can be a powerful way to cut your tax bill. But with recent changes expanding the phase-in range for this deduction, there are now even more ways to keep more of your hard-earned money. Here’s how you can take advantage of the new rules—and some creative planning strategies to help you get the most out of your QBI deduction. Let’s talk about what’s changed for 2025 and how you can plan accordingly.
What’s New? A Fresh Chapter for QBI in 2025
If you thought the QBI deduction was staying the same, think again! The landscape is shifting, and 2025 brings some important updates. This year, the phaseout thresholds are getting a boost: for married couples filing jointly, the phaseout now starts at $394,600 (up from $383,900 in 2024), and for single filers, it begins at $197,300 (up from $191,950 in 2024). The phase-in ranges—how much income you can earn before the deduction is completely phased out—remain at $100,000 for joint filers and $50,000 for singles, but those higher starting points mean more business owners can qualify for at least a partial deduction.
But that’s not all. There’s a sense of stability in the air: the QBI deduction, once set to expire, is now permanent. And while the most dramatic changes—like the expanded phase-in ranges ($150,000 for MFJ and $75,000 for single filers) and a new $400 minimum deduction for active business owners—don’t kick in until 2026, knowing what’s ahead can help you plan even smarter this year. The bottom line? 2025 is a year of opportunity, with higher thresholds and the promise of even more generous rules on the horizon.
Fourth Quarter of 2025: Actionable Steps to Maximize Your QBI Deduction
1. Time Your Income and Expenses
- If your taxable income is close to the QBI phaseout threshold, consider deferring income (such as delaying invoices or contracts) to 2026, or accelerating deductible business expenses into 2025. This can help keep your income within the optimal range for the deduction.
2. Max Out Retirement Contributions
- Contributing to a SEP IRA, Solo 401(k), or other qualified retirement plan before year-end can significantly reduce your taxable income. This is a powerful way to both save for the future and increase your QBI deduction for 2025.
3. Don’t Forget Your HSA
- If you’re eligible, make the maximum contribution to your Health Savings Account (HSA). This above-the-line deduction can help nudge your taxable income below the QBI phaseout threshold.
4. Give Back and Save
- Charitable giving is a win-win. Consider making donations or contributing to a donor-advised fund before year-end. Not only do you support causes you care about, but you also increase your itemized deductions and lower your taxable income.
5. Aggregate Your Businesses
- If you own multiple qualified businesses, talk to your advisor about aggregation. Combining businesses for QBI purposes can help you maximize the wage and property limitations, potentially increasing your overall deduction.
6. Review S Corporation Salaries
- S corporation owners: Now’s the time to review your salary. Adjusting your reasonable compensation can help optimize the balance between W-2 wages (which count toward the wage limitation) and QBI.
7. Section 179 and Bonus Depreciation
- Planning to buy equipment or property? Consider using Section 179 or bonus depreciation to write off the cost in 2025. This can lower your taxable income and help you qualify for a larger QBI deduction.
The Bottom Line
With higher QBI thresholds for 2025 and even bigger changes on the horizon, Q4 is a good time to make moves that can lower your taxable income and maximize your deduction.
Have questions or want to explore how these strategies could work for you? Reach out to our team – we’re here to help you make the most of your QBI deduction and all your year-end tax planning opportunities!