Section 199A QBI Deduction Calculator

The Section 199A Qualified Business Income (QBI) deduction allows eligible self-employed individuals, sole proprietors, S-corp shareholders, and partners to deduct up to 20% of their qualified business income from their taxable income. It was introduced by the Tax Cuts and Jobs Act of 2017, and the One Big Beautiful Bill Act made it permanent — overriding the December 31, 2025 sunset. Beginning in 2026, OBBBA also widened the income phase-in range and added a new $400 minimum deduction for taxpayers with at least $1,000 of QBI from a business they materially participate in.

You may qualify if you have income from a sole proprietorship, single-member LLC, partnership, S corporation, or trust that operates a qualified trade or business. The deduction is only available to non-corporate taxpayers. Specified Service Trades or Businesses (SSTBs) — such as law, health care, consulting, and financial services — are subject to additional restrictions for higher-income taxpayers.

For 2025, the phase-in range starts at $191,950 for single filers ($383,900 for married filing jointly) and ends at $241,950 ($483,900 for MFJ). Below the lower threshold, no W-2 or SSTB limitations apply. Above the upper threshold, the W-2 wage limitation is fully in effect, and SSTB businesses receive no deduction.

An SSTB is a trade or business where the principal asset is the reputation or skill of one or more employees or owners. This includes fields like health care, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, and investing. If your taxable income exceeds the upper threshold, an SSTB receives no QBI deduction. If you are below the lower threshold, the SSTB restriction does not apply.