The Tax Break That Changed CRNAs Small Businesses Forever
Download MP3Welcome back to Money Moves for CRNAs. Last time we said we'd cover the One Big Beautiful Bill Act passed on July 4, 2025 We found seven changes in this law that matter most for our 1099 CRNAs. Today, we'll zoom in on the biggest change for your business taxes. We're here to turn tricky tax rules into something you can actually understand.
Bill White:Want more? Check the show notes for a free two page handout on this new law. And a quick reminder, this podcast is for learning only. For personal help, reach out to a tax or financial adviser. Now, let's get started with your host Randy Larkin, CPA from Atlanta Tax Planner.
Randy Larkin:Hi, everyone. Today, we're diving into the story of the qualified business income deduction, also called QBI, and how the one big beautiful bill changed its future. We'll look at three chapters. First, what taxes look like before 2017. And second, how QBI worked from 2017 through 2025.
Randy Larkin:And third, finally, what would have happened if the one big beautiful bill wasn't passed versus what really happened now that it has been passed? This is probably the biggest change for 1099 CRNA business taxes, making this QBI permanent. So let's start at the beginning. Part one, before 2017. Picture this.
Randy Larkin:It's 2016, and you own a little bakery on Main Street. You wake up early, bake bread, sell pastries, and after paying for flour, sugar, and ranch, you've got some profit left. Back then, every single dollar of your profit was taxed. No special break. No discount.
Randy Larkin:If you made $50,000, you paid taxes on all $50,000. That's how it worked for every small business in America. Meanwhile, bigger corporations sometimes had special tax breaks or loopholes to lower their tax bills. Small businesses often felt left out. They were paying full freight, while larger companies found ways to pay less taxes.
Randy Larkin:That frustration is one of the reasons lawmakers look for a way to level the playing field. And in 2017, they created something brand new. Part two, QBI is born. 2017 through 2025. In late twenty seventeen, the Tax Cuts and Jobs Act was passed, and tucked inside was a gift for small business owners, the qualified business income deduction, also called QBI.
Randy Larkin:Here's how it worked. Instead of paying taxes on all your profit, you could exclude 20% of it. So if your bakery earned $50,000, you only paid taxes on 40,000. That saved real money and gave owners a chance to reinvest in their business, hire workers, or simply breathe a little easier at tax time. From 2018 all the way through 2025, this deduction was a big help to millions of small businesses.
Randy Larkin:It didn't matter if you ran a bike shop, a landscaping business, or a 1099 CRNA. QBI let you keep more of what you earned. But there was a catch. QBI wasn't permanent. From the start, it was designed to end after 2025.
Randy Larkin:That meant unless something changed, small businesses would lose this benefit, and we'd all go back to the pre 2017 rules. Part three, QBI is made permanent after 2025. Now let's imagine what would have happened if nothing changed. If the one big beautiful bill hadn't been passed, The calendar flips to January 2026. A bakery that used to pay taxes on 40,000 of its $50,000 profit is suddenly taxed on the full $50,000 again.
Randy Larkin:Overnight, tax bills go up across the country. Millions of small businesses feel the hit without the one big beautiful bill. That's the world we'd be in. No more QBI deduction. No more 20% break.
Randy Larkin:Just return to the old rules where every dollar counts against you at tax time. Some owners might come back on hiring. Others might raise prices. And many would simply feel like they had lost one of the few tax breaks designed specifically for them. That was the road we were heading toward until lawmakers stepped in.
Randy Larkin:Enter the one big beautiful bill. When it passed, it didn't just make small adjustments. It locked the QBI deduction into the tax code permanently. That means the 20% deduction is no longer a temporary bonus with an expiration date. It's part of the law here to stay.
Randy Larkin:Business owners no longer have to worry that their taxes will jump up after 2025. Let's go back to our bakery example. With QBI now permanent, if you earn 50,000 in profit, you'll still only be taxed on 40,000 year after year. That stability is huge. It allows small businesses to plan for the future with confidence.
Randy Larkin:In many ways, the one big beautiful bill gave small business owners what they'd been asking for all along. Certainty. No more countdown clock. Just a clear rule that helps them keep more of their hard earned money. Closing.
Randy Larkin:So let's recap. Before 2017, small businesses had no special deduction. Every dollar of profit was taxed. From 2017 through 2025, the QBI deduction gave owners a 20% break, but only as a temporary deal. Without the one big beautiful bill, QBI would have ended after 2025, and we'd all be back to the old rules.
Randy Larkin:But now that the one big beautiful bill has passed, QBI is permanent law. That 20% break is here to stay, giving small businesses the relief and stability they need. It's a story of where we were, where we almost went, and where we are now. And most importantly, it shows how tax policy can impact everyday people, like the owners of your local bakery, coffee shop, or 1099 CRNAs. Thanks for joining me on this journey through the history of QBI.
Bill White:Alright, friends. That's a wrap for today. You now know the basics of the QBI deduction and why it matters for 1099 CRNAs like you. Be sure to check out the show notes for your free handout on the seven major ways this tax law impacts CRNAs. Next time, we'll cover the rest of the story, the six other ways this bill can affect your taxes.
Bill White:Stay tuned, keep learning, and remember, you're not alone in this. Music licensed from premiumbeat.com. Under license number 7394047.
