What is the QBI 20% pass-through deduction and do I qualify?

The Qualified Business Income (QBI) deduction lets eligible self-employed people and owners of pass-through businesses (sole proprietors, partnerships, S corps, most LLCs) deduct up to 20% of their qualified business income, before any tax is calculated. So $100,000 of qualifying profit could mean a $20,000 deduction. Below 2025 taxable income of about $197,300 single / $394,600 joint, the rules are simple and most businesses qualify. Above those thresholds, limits based on W-2 wages and property kick in, and specified service businesses (consulting, law, health, finance) start to phase out entirely. The deduction doesn't reduce self-employment tax, only income tax. If you freelance or run a side business, wealthserene.com/tools/self-employed-hub can help you organize the numbers.