If you earn any money outside a W-2 — freelancing, consulting, a side business, 1099 work, a rental, an LLC — there's a good chance you're leaving a real deduction on the table. Not because you're careless. Because most people have never heard it explained plainly.

It's called the Qualified Business Income deduction — Section 199A, if you want the technical name. In plain terms: it can let eligible business owners deduct up to 20% of their qualified business profit, on top of their ordinary business expenses.

Read that again, because the "on top of" is the part people miss. This isn't deducting your laptop or your mileage. Those come first. Then, on the profit that's left, you may be able to deduct another 20% before the income is taxed. On $20,000 of qualifying side-hustle profit, that's potentially a $4,000 deduction most people in that situation don't realize exists.

Here's the timing piece. This deduction was originally set to expire after 2025. The tax law passed in 2025 made it permanent. So it's no longer a disappearing perk you have to scramble to use — it's a stable feature of the code you can actually plan around.

That same law added a small floor, too: a minimum deduction (indexed for inflation) for people who materially participate in a business with at least $1,000 of qualified income. The details are technical, but the direction is clear — the rule got broader and more durable, not narrower.

This is where I have to be a planner, not a hype account. The QBI deduction has real rules. It phases out at higher income levels — in 2026, the phase-in ranges start around $201,750 for single filers and $403,500 for joint filers, and certain "specified service" businesses (think many professional service fields) face additional limits above those thresholds. There are wage and property tests at higher incomes. It does not apply to W-2 wages. And how your business is structured affects the math.

Translation: for a lot of people with modest side income below those thresholds, the deduction is relatively clean. Above them, it gets genuinely complicated, and generic internet advice will steer you wrong.

Nothing in this issue is advice on your specific return — this is the kind of thing you apply with a tax professional, not from a newsletter. But you can walk in informed. If you have qualified business income, ask your preparer directly: "Am I taking the full QBI deduction I'm eligible for, and if not, why not?" That one question puts the burden where it belongs and surfaces money that quietly goes unclaimed every year.

Tax isn't a once-a-year event you react to in April. It's a system you can plan inside of all year. Knowing a deduction exists is what lets you ask the right question — and the right question, asked early, is often worth more than any receipt you tracked.

That's enough for one week.

— Mario

P.S. Got a friend with a side hustle who dreads tax season? Send them this. Free to subscribe at macwithintent.com/subscribe.

Educational only — not personalized tax or financial advice. Tax rules are complex, depend on your individual situation, and change; consult a qualified tax professional. Mario Cabral is a CERTIFIED FINANCIAL PLANNER™ professional. To unsubscribe, click here. MacwithIntent | [physical address] | © 2026.