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QBI deduction calculator

The Section 199A deduction takes up to 20% off pass-through business income. Find out whether you get all of it, part of it, or none.

Your business and return

Filing status
Tax year
Net profit minus ½ SE tax, SE health insurance and SEP/solo 401(k)
AGI minus standard or itemized deduction
Is it a specified service business?
W-2 wages and property (matter above $201,775)
Original cost of equipment/buildings still in service

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SECTION 199A · 2026EASYTAXCALC
QBI deduction
$18,000
20% of QBI$18,000
20% of taxable income cap$22,000
Deduction allowed$18,000
Approx. federal tax saved$3,960

Below the threshold: full 20%, no wage or SSTB limits.

The three zones

Below $201,775 of taxable income (single, 2026): you get the lesser of 20% of QBI or 20% of taxable income minus net capital gains. Nothing else matters.

Between $201,775 and $276,775: the wage/property limit phases in gradually, and a service business’s QBI is reduced proportionally.

Above $276,775: the deduction is capped at the greater of 50% of W-2 wages or 25% of wages plus 2.5% of property, and service businesses get nothing.

This calculator handles one business. With several, or with REIT dividends, publicly traded partnership income or losses carried forward, use Form 8995-A or a tax professional. For a whole-return estimate, the 1099 tax calculator applies QBI automatically.

Questions people ask

What is the QBI deduction?

Section 199A lets owners of sole proprietorships, partnerships, S corporations and many LLCs deduct up to 20% of their qualified business income. It was made permanent by the One Big Beautiful Bill Act in 2025. It reduces taxable income but not adjusted gross income or self-employment tax.

Who qualifies for the full 20%?

Anyone with qualified business income whose taxable income before the deduction is at or below the threshold: $201,775 single or $403,550 married filing jointly in 2026 ($197,300 / $394,600 in 2025). Below that, no wage or industry limits apply; the deduction is simply the lesser of 20% of QBI or 20% of taxable income minus net capital gains.

What is a specified service trade or business (SSTB)?

Fields such as health, law, accounting, consulting, financial services, athletics, performing arts and any business whose main asset is the owner’s reputation or skill. Above the threshold their deduction phases down, and it disappears entirely at the top of the phase-in range ($276,775 single, $553,550 joint in 2026).

What are the W-2 wage and property limits?

Above the threshold, the deduction for each business is capped at the greater of 50% of W-2 wages the business paid, or 25% of W-2 wages plus 2.5% of the original cost (UBIA) of its depreciable property. The cap phases in across the range, which is $75,000 wide for single filers from 2026 ($150,000 joint).

What counts as qualified business income?

Net profit from a US trade or business, reduced by the deductible half of self-employment tax, self-employed health insurance and retirement contributions attributable to the business. It excludes wages you earn as an employee, capital gains, most interest and reasonable compensation paid to you by your S corporation.