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The law makes the qualified business deduction permanent at 20%. It also increases the deduction limit phase-in range from $50,000 to $75,000 (single filers) and $100,000 to $150,000 (married filing jointly filers). In addition, the law establishes a new minimum deduction of $400 (adjusted for inflation) for taxpayers with at least $1,000 of QBI from one or more active trades or businesses.
The law also permanently extends bonus depreciation, allowing taxpayers to claim 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025, as well as specified plants planted or grafted after that date. In addition, modifications to IRC Section 168(k)(10) give taxpayers the option to elect to claim 40% bonus depreciation (or 60% for longer production period property or certain aircraft) in lieu of 100% bonus depreciation for qualified property placed in service during the first tax year ending after January 19, 2025.