QBI Deduction Calculator

Section 199A lets owners of pass-through businesses (sole proprietorships, partnerships, S-corps, and some trusts/estates) deduct up to 20% of their qualified business income (QBI) — profit from the business, not wages or capital gains — reducing their taxable income without needing to itemize.

The full 20% deduction applies with no further limits below $201,750 taxable income (single) or $403,500 (married filing jointly). Above that, a phase-in range applies — widened by recent law to $75,000 for single filers (ending at $276,750) and $150,000 for joint filers (ending at $553,500) — after which the full wage/UBIA limitation (or, for SSTBs, no deduction at all) applies.

A Specified Service Trade or Business — health, law, accounting, consulting, financial services, performing arts, and similar fields — loses the QBI deduction entirely once taxable income exceeds the upper threshold. Below the threshold, SSTB status doesn't matter at all; within the phase-out range, the deduction shrinks proportionally to zero for SSTBs specifically.

Once taxable income exceeds the threshold, the deduction for non-SSTB businesses gets capped at the greater of: 50% of the W-2 wages the business paid, or 25% of W-2 wages plus 2.5% of the unadjusted basis (UBIA) of qualified property (like equipment or real estate) the business owns.

This models the standard Section 199A formula, including the 2026 thresholds and a new $400 minimum deduction floor for QBI of $1,000 or more — but real returns can involve multiple businesses, aggregation elections, and REIT/PTP income treated differently. Consult a tax professional for your exact filing.