Does the QBI deduction still exist, and do I qualify?
Yes, the qualified business income deduction still exists and is now permanent. The 20 percent deduction on qualified business income that was scheduled to expire has been made permanent, and starting in 2026 there’s a new $400 minimum deduction for taxpayers with small QBI amounts.
The catch for anyone running a healthcare-related business is significant. Medical services, therapy practices, and health services are classified as “specified service trades or businesses” under the tax code. This classification limits who can actually claim the deduction based on taxable income.
For 2026, the deduction begins phasing out for single filers with taxable income above roughly $201,775 and joint filers above $403,500. The deduction disappears entirely once taxable income exceeds approximately $276,775 for single filers and $553,500 for joint filers. These figures adjust for inflation each year, so verify them when you file.
This matters especially for clinicians who stack W-2 clinical income with business income. If you’re working as a nurse practitioner, physician assistant, or physician during the week while running a med spa or home care business on the side, your W-2 wages count toward that taxable income threshold. A business that would qualify for the full deduction on its own might lose part or all of that benefit when combined with your employment income.
The planning opportunities involve timing and structure. Shifting income between years, optimizing your entity structure, or using other tax strategy approaches might help you stay under the phaseout threshold in a given year. For owners in the phaseout range, the difference between qualifying and not qualifying can be meaningful. Twenty percent of your business income is real money, and a few thousand dollars in the right direction on taxable income could determine whether you keep it or lose it.
A CPA for medical businesses can walk through your specific numbers and help you understand where you land. If you’re unsure whether you qualify or want to explore what planning might help, book a consultation and we can look at your situation together.
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More Questions
I bought an expensive laser or piece of equipment. How does the write-off work?
You can often deduct most or all of the equipment cost in the first year using Section 179 or bonus depreciation. This applies even if you financed the purchase with a loan.
Read answerMemberships and packages bring cash in early. Where is the catch?
The catch is that prepaid cash is a liability, not income. Until you deliver the treatments, that money represents services you owe. The books must track the unredeemed balance and recognize revenue only as sessions happen.
Read answerHow do I know if my practice can support a second clinician?
You need three things to line up: proven demand beyond your current capacity, projected revenue from the new hire that comfortably exceeds their fully loaded cost, and enough cash to carry them through the ramp-up months before their schedule fills.
Read answerCan one person handle both my business return and my personal return?
Yes, and for pass-through owners it's practically necessary. Your business return generates a K-1 that flows directly onto your personal return. Having one CPA see both sides means better coordination of salary, distributions, and deductions.
Read answerWhy does my profit and loss look fine while my bank account feels empty?
Your profit and loss statement and your bank account measure different things at different times. The gap usually comes from insurance receivables not yet collected, inventory purchased but not used, loan principal payments, prepaid package cash already spent, owner draws, and taxes never set aside.
Read answerI inject on weekends and run the spa around my hospital shifts. What does my tax picture look like?
Your W-2 income sets your bracket, then spa profit stacks on top at that rate. You face self-employment tax, quarterly estimates, and potential QBI phaseout as a high earner in a health business. The wins come from structure and planning.
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