The 23% Tax Break You Probably Didn’t Know You Qualify For
Let’s talk tax code—but let’s do it the Let’s Get Real way.
Because buried deep in the One Big Beautiful Bill Act is a massive win for everyday entrepreneurs. I’m talking about the 23% pass-through deduction, also known as the Qualified Business Income (QBI) deduction.
This is one of the cleanest, most powerful ways to reduce your tax bill legally. But the kicker? Most folks in our communities don’t even know it exists.
WHAT IS THE 23% PASS-THROUGH DEDUCTION?
If you run a business as an LLC, sole proprietorship, S corporation, or partnership, the IRS lets you deduct 20–23% of your qualified business income (QBI) from your taxable income. In this new bill, the deduction has been bumped to 23%—and it’s permanent.
Here’s the breakdown:
Let’s say your business nets $100,000.
With QBI, you’re only taxed on $77,000.
Depending on your bracket, that could mean $3,000–$8,000 in savings.
But you only get this if your business is set up right.
WHO THIS BENEFITS
This is built for people who hustle legally but need structure. Think:
Barbers and beauty professionals
Coaches and consultants
Event planners and DJs
Clothing brand owners and boutique shops
Content creators, YouTubers, and influencers
Mobile notaries and real estate agents
If you're earning through a service, skill, or product—but reporting it on a 1099 or just doing it under your name—you’re leaving money on the table.
HOW TO QUALIFY AND MAXIMIZE IT
Here’s what you need to do to get that 23% deduction working for you:
1. Form an LLC or Elect S-Corp Status
If you’re currently a sole proprietor, your first move is to legally establish your business. You can file an LLC through your state (usually under $200).
Want to level up? Elect S-Corp status through the IRS (Form 2553) and set up payroll to split income into salary + distributions.
2. Keep Clean Books
Open a separate business checking account.
Use software like QuickBooks or Wave to track income and expenses.
Pay yourself a reasonable salary (required for S-Corps).
3. Work with a Tax Pro Who Understands QBI
Not all CPAs are created equal. You need someone who knows the QBI deduction inside and out and can help you avoid disqualifying mistakes.
4. Be Mindful of Income Limits
If you’re making over ~$182K (single) or ~$364K (married), the rules get trickier. Certain service businesses may phase out. But creative tax planning can still help.
5. Don’t Wait Until Tax Season
This isn’t a deduction you magically apply in April. It starts with how you set up and operate your business TODAY.
REAL TALK: WHY THIS MATTERS
This is how wealth is built—not by making more money, but by keeping more of it.
The QBI deduction is one of the few provisions that actually helps small, Black, Brown, and first-gen business owners get ahead—if we know how to use it.
But it doesn’t apply if you’re running a hustle with no paperwork. It doesn’t help if your cash isn’t tracked. It won’t show up if you’re invisible to the tax code.
This is why we preach structure. Because when you build your business the right way, you don’t just make more—you keep more. And you can reinvest in growth, pay yourself well, and move from surviving to scaling.
NEXT STEPS
If you’re making $30K–$100K in your business, this deduction could save you thousands.
Form your LLC. Consider S-Corp if you’re clearing over $50K.
Talk to a pro. Don’t DIY this.
And stay tapped in—we’ll be walking through QBI, business structure, and wealth planning all season.
Because this is what they don’t teach us in school. And this is exactly how we flip the game.
Join our next Black Mammoth Power Hour, where we break down how to structure your business, qualify for the 23% pass-through deduction, and keep more of the money you work so hard to earn. This isn’t surface-level advice—this is strategy built for Black and Brown entrepreneurs who want to build real wealth.
Learn how to shift from sole prop to LLC/S-Corp
Understand QBI in plain English
Ask questions live and get real answers
Walk away with a plan tailored to your income and goals
Space is limited. Knowledge is power. Let’s get it.