Lorem Ipsum

Two key provisions from the Big Beautiful Bill stand out this week—one boosts deductions for independent earners, while the other introduces a brand-new way to save for the next generation.

1. Boost for Qualified Business Income (QBI) Deduction (Sec. 70105)

If you’ve got 1099 income, run a small LLC, or manage your own business, the QBI deduction just got more generous.

Here’s what’s changed:

• Higher Phase-In Thresholds (2026):
  • Single filers: $75,000 (up from $50,000)
  • Joint filers: $150,000 (up from $100,000)
• New $400 Minimum Deduction: Even if your QBI deduction phases down to $0, you’ll still get at least $400—as long as you have at least $1,000 in qualified business income.

Bottom line: This provides a cushion during lean years and ensures small business owners don’t miss out entirely when phaseouts kick in.

2. Trump Accounts: A New Way to Jumpstart Savings for Kids (Sec. 70204)

The Big Beautiful Bill also introduced a brand-new savings vehicle: the Trump Account. Designed to help families invest in their children’s future, it comes with some unique perks.

Here’s how it works:

• $1,000 Starter Boost: Families with a qualifying child born between 2025 and 2028 receive a government-funded $1,000 contribution by opening a Trump Account.
• Annual Contributions Up to $5,000: Parents can contribute up to $5,000 per year, per child (under 18). Contributions don’t count as taxable income, and the limit will adjust for inflation starting in 2028.
• Employer Contributions Allowed: Employers can chip in up to $2,500 annually—tax-free for the employee.
• Income Exclusion Perks: Contributions (from you or your employer) are excluded from gross income, making this a tax-efficient savings option.

Heads up: Improper claims come with penalties, so good setup and documentation are essential.

What This Means for Solopreneurs & Families

Together, these provisions reflect the Big Beautiful Bill’s focus on supporting small business owners and families. Independent earners gain more reliable deductions through the QBI expansion, while parents get a powerful, tax-advantaged tool to save for their kids’ future.

Looking Ahead

Next week, we’ll continue unpacking what’s inside the Big Beautiful Bill. On deck: updates for homeowners and property investors—plus what’s changing with mortgage interest deductions. 

Final Thoughts

The Big Beautiful Bill is rewriting the playbook for entrepreneurs and families alike. Whether you’re running your own business or setting aside savings for your children, these new provisions can help you keep more of what you earn—and plan smarter for the years ahead.

Schedule a call today to see how these changes could fit into your 2025 tax strategy.