QSBS & Permanent QBI: High-Stakes Business Strategies That Save Millions in 2026

If you're paying $50,000 or more in taxes annually, you're no longer playing the same game as the average taxpayer. You're operating in a different league: one where every strategic move can save (or cost) you hundreds of thousands of dollars. And in 2026, two provisions under the One Big Beautiful Bill Act are creating unprecedented opportunities for construction business owners, contractors, and high-net-worth earners: permanent Qualified Business Income (QBI) deductions and expanded Qualified Small Business Stock (QSBS) exclusions.

The question isn't whether these strategies apply to you. It's whether you're sophisticated enough to leverage them before your competitors do.

The Permanence Game-Changer: QBI Is Here to Stay

For years, business owners lived with uncertainty. The 20% Qualified Business Income deduction: arguably the most powerful tax break for pass-through entities: was set to sunset at the end of 2025 under the original Tax Cuts and Jobs Act. Construction company owners, contractors, and consultants structured their businesses around this deduction, knowing it could disappear at any moment.

The One Big Beautiful Bill Act changed everything by making the QBI deduction permanent.

What QBI Really Means for Your Bottom Line

If you own a construction business generating $500,000 in qualified business income, the 20% QBI deduction delivers a $100,000 reduction in taxable income. At the top marginal rate, that's roughly $37,000 in annual tax savings: not just this year, but every year going forward.

For high-earners running multiple pass-through entities, the math becomes even more compelling. A contractor operating three LLCs with combined QBI of $1.2 million saves approximately $88,800 annually through proper structuring and tax planning. Over a decade, that's nearly $900,000 that stays in your business instead of going to the IRS.

But here's the catch: QBI isn't automatic. It requires strategic entity structuring, proper classification of income, and coordination with other deductions. This is where compliance-only accounting falls apart: and where business consulting and advanced tax planning become essential.

QSBS: The Exit Strategy That Saves Millions

While QBI handles your annual tax optimization, Qualified Small Business Stock provisions address something even more lucrative: your business exit.

Under the expanded OBBBA framework, stock issued after July 4, 2025, now qualifies for tiered capital gains exclusions that can eliminate millions of dollars in taxes when you sell your business.

The New QSBS Tiers Under OBBBA

The traditional five-year holding period requirement has been restructured into three powerful tiers:

• 50% exclusion after holding stock for 3+ years

• 75% exclusion after 4+ years

• 100% exclusion after 5+ years

Let's put this in real numbers. Say you're a construction business owner planning to sell your company for $20 million in 2029. If your stock was issued in 2026 and held for three years, you'd qualify for a 50% exclusion on $15 million in gains (the new per-issuer cap). That's $7.5 million in tax-free gains, saving approximately $1.78 million in federal capital gains taxes.

Hold for the full five years, and the entire $15 million becomes tax-free: a $3.57 million tax savings compared to ordinary capital gains treatment.

The Higher Asset Threshold Opens More Doors

Previously, only businesses with aggregate gross assets under $50 million qualified as "small businesses" for QSBS purposes. The One Big Beautiful Bill Act increased this threshold to $75 million, indexed for inflation starting in 2027.

For construction firms and contractors experiencing rapid growth, this means you can scale significantly without losing QSBS eligibility. A mid-sized construction company generating $60 million in annual revenue now has breathing room to grow while maintaining qualification for one of the most powerful tax benefits in the code.

From Compliance to Strategy: Why This Matters Now

Here's the uncomfortable truth: most accounting services focus on compliance: making sure your returns are filed correctly and on time. That's table stakes. It's not strategic, and it's certainly not worth the premium you're paying if you're a high-earner.

The difference between compliance accounting and strategic tax planning is the difference between saving $20,000 and saving $200,000.

Strategic tax planning means:

• Entity structuring that maximizes QBI while protecting assets

• Stock issuance timing to trigger optimal QSBS treatment

• Income characterization that shifts revenue into tax-advantaged buckets

• Multi-year modeling that positions you for exits, expansions, or transitions

This level of sophistication requires more than software and templates. It requires expertise in business consulting, deep knowledge of the tax code, and a commitment to proactive planning rather than reactive filing.

The Smith Wealth Accelerator: Built for High-Stakes Business Owners

At Smith Tax & Wealth Group, we don't do compliance-only accounting. We built the Smith Wealth Accelerator specifically for construction business owners, contractors, and high-net-worth earners who understand that tax planning is a profit center, not a cost center.

The Smith Wealth Accelerator is a systematic approach to maximizing tax returns through:

1. Comprehensive Entity Analysis

We review your current business structure and identify opportunities to optimize pass-through income, maximize QBI deductions, and prepare for future QSBS qualification. Many construction businesses leave six figures on the table simply because their entities weren't structured with advanced tax planning in mind.

2. Exit Planning Integration

Whether you're planning to sell in three years or ten, QSBS strategy begins today. We help you issue qualifying stock, track holding periods, and coordinate with business valuations to ensure maximum exclusion when you exit.

3. Virtual Tax Services for Nationwide Clients

You don't need to be local to work with us. Our virtual tax services model means busy contractors and CEOs across the country access the same high-level tax planning strategies without the geographic limitations of traditional firms. You run your construction projects from multiple states: your tax team should be just as flexible.

4. Proactive Multi-Year Modeling

We don't just prepare your 2026 return. We model 2027, 2028, and beyond, showing you exactly how strategic decisions today compound into millions in savings over the next decade.

The Million-Dollar Question: What's Your Current Strategy?

If you're paying $50,000 or more in taxes and your current accountant hasn't discussed QBI permanence, QSBS qualification, or entity restructuring with you, you're not getting tax planning: you're getting compliance.

And compliance alone is costing you a fortune.

The One Big Beautiful Bill Act created a once-in-a-generation opportunity for business owners willing to act strategically. The construction industry, in particular, sits in a perfect position to leverage both QBI deductions for annual savings and QSBS exclusions for exit planning.

But these strategies require expertise, foresight, and a partner who thinks like a business consultant, not just a tax preparer.

Take the Next Step

High-stakes business owners don't wait for tax season to think about taxes. They build comprehensive strategies that maximize tax returns, preserve wealth, and position them for profitable exits.

If you're ready to move beyond basic accounting services and into real tax planning, reach out to Smith Tax & Wealth Group. We specialize in working with construction business owners and high-net-worth earners who understand that the best return on investment isn't in the market: it's in keeping more of what you earn.

Let's talk about your QBI optimization, your QSBS eligibility, and how the Smith Wealth Accelerator can save you millions over the next decade.

Because when you're paying $50k+ in taxes, strategy isn't optional( it's everything.)