20 Nov Can I use the QBI for rental house income?

Q. How does the QBI work? I have an LLC that I used for a rental house. Can I save on taxes with QBI for that?
— Landlord

A. We may have some good news for you.

You said QBI. It stands for the Qualified Business Income (QBI) deduction.

The deduction is generally 20% of the net income from qualified trades or businesses that includes rental activities if the owner’s primary purpose for engaging in the rental activity is for income or profit and the owner is involved in the activity with continuity and regularity, said Neil Becourtney, a certified public accountant and tax director with Smolin, Lupin & Co. in Red Bank.

The QBI deduction was set to expire after 2025 but the One Big Beautiful Bill Act signed into law in early July made it permanent, he said.

Depending on your filing status and the level of your taxable income before a QBI deduction, you would either need to file IRS Form 8995 or Form 8995-A, Becourtney said.

“For 2025, Form 8995 can be filed if taxable income before a QBI deduction is at or below $197,300 ($394,600 for joint filers),” he said. “If taxable income exceeds these thresholds then Form 8995-A must be filed where the deduction might be limited based on the amount of wages paid and the cost basis of the house.”

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This story was originally published in November 2025.

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