The Wall Moved
$494,600. That was the number. You filed jointly. You ran a law firm, a consulting shop, or a medical practice. That number was a shutoff valve. Your taxable income crossed it, and your QBI deduction dropped to zero. Not a smaller deduction. Zero.
The IRS calls your business a "specified service trade or business." SSTB. Fancy label for people who sell their brains. Lawyers. Doctors. Consultants. Accountants. The tax code said: once you earn past the ceiling, you lose the 20% pass-through deduction. All of it.
That valve just got moved.
The Bypass
The One Big Beautiful Bill expanded the phase-in range by 50%. For joint filers, the old range was $100,000 wide. Now it is $150,000 wide. And the 2026 inflation-adjusted cutoffs land at $403,500 on the low end and $553,500 on the high end.
That high end is the number that matters. The old ceiling was $494,600. The new ceiling is $553,500. The gap is $58,900.
Think of it as a pipe. Cash flows in at the top. A shutoff valve sits at the end. The old pipe was short. Your income pushed past $494,600, the valve tripped, and no deduction flowed out. The new pipe is longer. The valve sits $59,000 further down the line. More cash passes through before anything shuts off.
Here is what that looks like on a napkin.
The Napkin
You file jointly. You run a consulting firm taxed as an S corp. Your taxable income is $520,000. Your qualified business income (the K-1 number after you pay yourself a reasonable salary) is $300,000.
Last year, $520,000 sat above the $494,600 ceiling. Your deduction was zero.
Now run the new math.
The ceiling is $553,500. You are inside the range. The gap between you and the ceiling is $33,500. Divide that gap by the full $150,000 range. You get 22.33%. That is your "applicable percentage." The fraction of QBI the code lets you use.
22.33% of $300,000 is $67,000.
20% of $67,000 is $13,400.
That is your deduction. Same income. Same business. Same return. Last year it was zero. This year it is $13,400.
I mean. The wall moved.
Iran's New Leader Just Said Something That Should Terrify Every American
Iran's new Supreme Leader made an announcement that could trigger the largest financial crisis since 2008.
"Iran will keep the Strait of Hormuz shut as leverage against the United States."
40% of the world's oil passes through the Strait of Hormuz. It's been effectively closed since the Iran war started.
Oil just crossed $100 per barrel.
But here's the part that should terrify you: Every oil crisis in modern history has ended the same way.
1973 Oil Crisis: Gold surged from $35 to $200 (571% gain)
1979 Oil Crisis: Gold exploded from $200 to $850 (425% gain)
This time is different. This time could be exponentially bigger.
The U.S. government has 8,133 tonnes of gold sitting in Fort Knox, valued on the books at $42.22 per ounce.
With gold trading above $5,000, that's a $750 billion accounting error.
President Trump has the legal authority to fix it with a single signature.
When he does, gold wouldn't just rally. It would explode to unprecedented levels.
$7,000? $10,000? $15,000?
The smart money knows this. They're positioning now, while most Americans are focused on gas prices.
That's why I've partnered with American Alternative Assets to bring you The Great Gold Reset.
The Firewall
Look. The same bill created a new cap on itemized deductions under Section 68. If you land in the 37% bracket, your itemized deductions get trimmed. Some folks worry that trim raises their taxable income, which then shoves them above the QBI ceiling.
It doesn't. The statute says ignore the Section 68 haircut when you run your QBI math. Two pipes now run through the same return. One carries the taxable income the IRS uses to compute your tax. The other carries a lower number, untouched by the haircut, that feeds your QBI calculation. The code carved out a separate pipe for this. Your itemized deduction haircut stays in its lane.
CRMSDC, in its OBBBA breakdown series, put it flat:
Your 20% pass-through deduction is preserved in full.
Right.
The energy story near the Grand Canyon
A drilling crew near the Grand Canyon just confirmed what the International Energy Agency calls one of the largest energy resources ever measured.
Enough to meet global electricity demand 140 times over.
Not 140 percent. One hundred and forty times.
Everyone knew the energy was there. Reaching it was the problem - miles of solid rock.
That changed last year.
A crew drilled nearly three miles down in 16 days.
The Department of Energy said it would take 64.
They weren't after oil.
They were after the heat.
Google already signed a 15-year deal. Bill Gates wrote a $100 million check. And on August 18th, Washington hands this resource an edge no other energy source has.
One company sits at the center.
The Squeeze
That 22.33% is not fixed. It is a sliding scale. Every dollar of taxable income you move changes the output. Push your income down $10,000 through a retirement contribution and the applicable percentage jumps. The deduction grows with it.
The levers are the ones you already know. Max out retirement plans. Time income between tax years. Dial the salary-versus-distribution split on your S corp.
The accounting firm KahnLitwin:
Some owners of SSTBs and pass-through businesses subject to wage and investment limits may have larger deductions going forward.
Sure. The question is how much larger. That depends on which levers you pull and when you pull them.
The wall moved. The code changed. The pipe is longer. The valve sits further down the line. Same income, different number at the bottom of the page.
