What is a QBI wage and property limitation?

A QBI wage and property limitation restricts qualified business income deductions for taxpayers exceeding income thresholds. The limitation caps deductions at the greater of 50% of W-2 wages or 25% of wages plus 2.5% of qualified property basis. Under the One Big Beautiful Bill Act, only 75% of excess income is taken into account in calculations. Business owners can increase W-2 compensation through S Corporations to maximize QBI deductions.

Related Terms

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Child & dependent tax credits

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Augusta rule

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