Free Calculator
QBI Deduction Calculator
Section 199A allows up to a 20% deduction on qualified business income. The phase-out for SSTBs above the threshold makes the calculation non-trivial.
Your situation
Section 199A allows up to a 20% deduction on qualified business income from passthroughs. SSTBs (specified service trades) phase out above the income thresholds.
Estimated QBI deduction
$30,000
Section 199A deduction allowed against taxable income
Read this carefully
Directional only. Above the threshold for non-SSTBs, the deduction is limited by W-2 wages and UBIA of qualified property, not modeled here. REIT/PTP income, aggregation elections, and net loss carryovers also matter. Review your QBI position.
Estimates for educational purposes only, not tax, legal, investment, or accounting advice. Your specific facts will change the result; confirm with a CPA before acting.QBI interacts with the S-corp decision
S-corp owners often lose part of their QBI deduction because the wage they pay themselves reduces QBI. The S-corp savings can still exceed the QBI loss, but the right answer requires modeling both at the same time.
Frequently Asked
QBI deduction questions
- Who qualifies for the QBI deduction?
- Owners of pass-through businesses (sole proprietors, single-member LLCs, multi-member LLCs/partnerships, and S-corps), with qualified business income from a U.S. trade or business. C-corp shareholders do NOT qualify; C-corp dividends are not QBI.
- What is an SSTB?
- A 'specified service trade or business' under Section 199A: health, law, accounting, actuarial, performing arts, consulting, athletics, financial services, brokerage, investing/investment management, and any trade where the principal asset is the reputation or skill of an owner. SSTB owners phase out of the QBI deduction above the income thresholds.
- What are the income thresholds?
- Approximate 2026 thresholds (adjusted annually): $241,950 (single) / $483,900 (married filing jointly). Below: full 20% deduction regardless of SSTB. Phase-in range: $50,000 (single) / $100,000 (MFJ). Above: SSTBs lose the deduction entirely; non-SSTBs are limited by W-2 wages and UBIA of qualified property.
- Does the calculator handle the W-2 wage and UBIA limits?
- No, for simplicity. Above the phase-in for non-SSTBs, the deduction is limited to the greater of (a) 50% of W-2 wages paid OR (b) 25% of W-2 wages + 2.5% of UBIA of qualified property. The calculator assumes those limits are satisfied. For an accurate calculation when those limits bind, work with a CPA.
Keep reading
Schedule K-1
IRS form reporting a partner's, S-corp shareholder's, or trust beneficiary's share of income, deductions, and credits.
GlossaryPassthrough Entity
A business entity that doesn't pay federal income tax; income passes through to the owners.
GlossaryS-Corporation (S-corp)
A passthrough entity that allows owner-employees to split income between salary (subject to FICA) and distribution (not).
GlossaryLimited Liability Company (LLC)
A flexible legal entity that combines personal liability protection with passthrough taxation by default.
GuideQBI (Section 199A) Deduction: The Full Walkthrough
The 20% pass-through deduction has SSTB phase-outs, wage and UBIA limits, REIT/PTP rules, and aggregation elections. Here's the complete framework, not the surface version.
GuideCalifornia PTET: The SALT-Cap Workaround for High-Income Owners
California's Pass-Through Entity Tax election lets passthrough owners pay state tax at the entity level, sidestepping the $10K federal SALT cap. Here's how to elect and when it pays off.