Form 8995 and 8995-A Changes for 2025: QBI | HelloBooks The 2025 QBI forms raise the thresholds to $197,300 and $394,600 and let certain tip income be excluded from QBI. What changed on 8995 and 8995-A.
The QBI forms barely moved for 2025, but two changes matter: higher income thresholds, and a new rule that some tip income may be left out of qualified business income.
Free Plan with invoices within 200 transactions, bills & quotes — no credit card.
Form 8995 threshold, joint
$394,600
Applies: Tax year 2025From IRS.gov · checked October 10, 2026
Form 8995 lists two What’s New items: the taxable income limits were adjusted for inflation, and certain tip income may be excluded when figuring QBI. Form 8995-A lists only the tip income item.
A client can use the simpler Form 8995 with taxable income before the QBI deduction of $394,600 or less on a joint return, or $197,300 or less on any other return. Above that, Form 8995-A applies, with the phase-in range ending at $494,600 joint and $247,300 for other returns.
A self-employed tipped worker may now deduct qualified tips on Schedule 1-A. The QBI instructions point to excluding certain tip income from QBI, which stops the same income counting twice. Read the “Determining your QBI” section before finishing a return for a tipped sole proprietor.
Separate tip income from fee or sales income in the ledger. With its own income account in HelloBooks, the tip total is a report at year-end, and it matches what you put on Schedule 1-A.
The plain-English summary for business owners
Form 8995 · tax year 2026 (draft)
Schedule C (Form 1040) · tax year 2025
Schedule 1-A · qualified tips
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
Free Plan with full access to the AI accountant — no credit card, no time limit.