Bookkeeping, tax, and advisory services for service businesses across New England and nationwide.

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I am an architect or engineer. Do the service-business limits on the QBI deduction apply to me?

No, they don’t apply to you. This is genuinely good news for architecture and engineering firms. The tax code specifically carves out architects and engineers from the rules that limit the qualified business income deduction for high-earning service businesses.

Here’s the background. The Section 199A deduction allows pass-through business owners to deduct up to 20 percent of their qualified business income. But for what the IRS calls “specified service trades or businesses,” the deduction phases out and eventually disappears once taxable income exceeds certain thresholds. Doctors, lawyers, accountants, financial advisors, and consultants all fall into this category. Once their income rises above the threshold, they lose part or all of the deduction.

Architecture and engineering are explicitly excluded from that definition. Even if your income is well above the phase-out thresholds, you still qualify for the full 20 percent QBI deduction. The IRS treats you the same as a manufacturing or retail business for purposes of this rule.

There is one limit to keep in mind. Above certain income levels, the deduction becomes capped by either your W-2 wages or a combination of wages and the unadjusted basis of your depreciable property. For a firm with employees and office equipment, this usually isn’t a barrier. But if you’re a solo practitioner with no employees, the wage limit could reduce your deduction. How you structure compensation and whether you have qualifying property can affect the calculation.

Compare your situation to an accounting firm or law practice at the same income level. Those owners face a hard ceiling on the deduction once income passes the threshold. You keep it in full, subject only to the wage and property limits. That difference can mean tens of thousands of dollars in tax savings each year.

This creates a real planning opportunity worth capturing. Proactive tax strategy helps you structure wages, compensation, and property in a way that maximizes the deduction. The calculation flows through to your personal return, so accurate books are essential. If your firm’s numbers aren’t right, you could be leaving money on the table or creating problems if the IRS takes a closer look.

If you run an architecture or engineering firm and want to make sure you’re capturing this deduction fully, reach out for a consultation. Simona is a CPA and Enrolled Agent who provides small business bookkeeping services and tax planning for professional service firms across New England and nationwide.

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How much does bookkeeping cost?

Monthly bookkeeping starts at $199 a month, with add-ons like bill pay and invoicing starting at $99 each. Pricing depends on your transaction volume, number of accounts, and whether you need payroll or tax work. Catch-up bookkeeping for past months is scoped separately.

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My med spa does both services and retail and injectables. How do I handle the added complexity?

Med spas need their chart of accounts, sales tax setup, and payroll configured to handle each revenue type separately. Massachusetts taxes retail product sales but not most services, and getting this wrong creates compliance problems. Clean separation from the start gives you visibility into which parts of the business actually make money.

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My business is seasonal. How should I manage cash flow and taxes in the slow months?

Set aside 25 to 30 percent of busy-season profit for taxes, plus enough to cover several months of operating expenses during slow periods. Pay quarterly estimated taxes so you don't face a large bill all at once, and track your cash runway monthly so you see problems before they arrive.

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I got an IRS notice. Can you deal with the IRS for me?

Yes. As an Enrolled Agent, Simona has unlimited rights to represent taxpayers before the IRS. She can respond to the notice, speak with the IRS on your behalf, and handle the entire process from start to finish.

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1099 or W-2: how do I know if my worker is a contractor or an employee?

Two tests apply: the federal IRS test weighing control factors, and in Massachusetts, the much stricter ABC test. In Massachusetts, a worker is presumed an employee unless you can prove all three prongs of the ABC test.

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How do I keep accurate books with high daily volume and thin margins?

Reconcile your POS sales daily, track food and labor costs as percentages of revenue weekly, and close your books within two weeks of month end. Small errors compound fast when margins are tight, so accuracy depends on catching problems while you still remember what happened.

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Massachusetts bookkeeping and accounting firm helping service businesses across New England and nationwide. We go beyond recording transactions to show owners what their numbers actually say about their business. Founded by Simona Leppala, a CPA and Enrolled Agent.

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