Bill > HR3249

This bill proposes modifications to the Qualified Business Income (QBI) deduction, which is part of the Internal Revenue Code and allows certain small business owners and self-employed individuals to deduct up to 20% of their business income from their taxes. The key provisions include establishing a guaranteed $25,000 deduction for qualified business income, regardless of the total income amount, and implementing an adjusted gross income (AGI) limitation that reduces the deduction for taxpayers with AGI exceeding $200,000 for individual filers or $400,000 for joint returns. The bill simplifies the existing QBI deduction rules by eliminating complex calculations related to W-2 wages and removing certain paragraphs that previously governed the deduction's application. The bill also clarifies that the deduction applies only to business income and not to income earned as an employee, and specifies that the new rules will take effect for taxable years beginning after December 31, 2025. These changes aim to provide more straightforward tax relief for small business owners and simplify the tax code's treatment of business income deductions.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/3249/all-info