QBI (Section 199A) Deduction Calculator
Free Section 199A qualified business income (QBI) deduction calculator. See your 20% QBI deduction after the taxable-income threshold, wage/UBIA limit, SSTB phase-out, and the new OBBBA minimum deduction.
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Additional Details
2026 Section 199A QBI Deduction
Estimated • Based on your inputs
Your Phase-In Status
Below the threshold amount -- full 20% deduction, no wage/UBIA limit or SSTB exclusion applies.
Detailed Breakdown
Disclaimer: This calculator provides estimates for informational purposes only. Results should not be considered financial, tax, or legal advice. Consult a qualified professional for your specific situation.
How This Calculator Works
Calculation methodology and assumptions
The Sec. 199A deduction equals the lesser of (a) 20% of your qualified business income (QBI) plus 20% of qualified REIT dividends/PTP income, or (b) 20% of your taxable income minus net capital gain. Below the taxable-income threshold for your filing status ($403,500 married filing jointly / $201,750 single & head of household / $201,775 married filing separately, for 2026), the full 20% QBI amount applies with no wage or business-type limitation. Within the phase-in range above that (widened to $150,000 for joint filers and $75,000 for others by the One Big Beautiful Bill Act), a specified service trade or business (SSTB) has its QBI, wages, and UBIA phased down toward zero, while a non-SSTB instead phases down toward the W-2 wage/UBIA limitation (the greater of 50% of W-2 wages, or 25% of W-2 wages plus 2.5% of the unadjusted basis of qualified property). Above the top of the range, SSTBs get no deduction and non-SSTBs are fully limited to the wage/UBIA cap. New for 2026, the OBBBA also guarantees a $400 minimum deduction for anyone materially participating in a business with at least $1,000 of QBI, on top of making the Sec. 199A deduction permanent (it had been scheduled to expire after 2025). This calculator models a single qualified trade or business; taxpayers who aggregate multiple businesses or have income from multiple REITs/PTPs should treat this as an estimate and consult IRS Form 8995-A for the complete computation.
Read the 2026 Section 199A deduction estimate
- 1
Choose the actual filing status
Use the form’s filing-status option and enter taxable income before the QBI deduction, qualified business income and net capital gains in their separate fields. These are different tax concepts.
- 2
Enter business-specific limitations
Supply qualified W-2 wages and qualified-property UBIA where requested, and identify SSTB status and material participation using the official definitions. Owner salary is not automatically qualified business income.
- 3
Read deduction and limitations separately
The deduction output reduces taxable income; it is not a refundable credit or a cash tax-saving output. Enter qualified REIT/PTP income separately from the single business, and read its separate component and the overall taxable-income cap.
Read the inputs and reconcile the outputs
Work from the proposed return and one qualified business. Keep taxable income before this deduction separate from QBI and net capital gains; use official worksheets for the correct amounts.
The calculator applies the selected status’s income limitations, wage/property test and SSTB treatment, then reports the modeled deduction and its separate marginal-rate tax-saving illustration.
Result: Check the full 2026 IRS worksheet before filing. This single-business model does not aggregate multiple activities, carryovers or every cooperative, REIT, partnership and trust circumstance. Eligibility and a final tax saving cannot be inferred from the business label alone.
What changes this estimate
Income and business type
Income limits and SSTB treatment depend on the return and activity, not simply revenue.
Wages and property
The wage/UBIA limitation requires qualifying amounts, not any payroll or asset total.
Limits and checks before acting
- Use the primary IRS source linked in this calculator for the current tax-year rules.
- Do not add the same deduction to both business expenses and QBI inputs.
- The LLC comparison excludes this deduction; its results and this tool are not automatically additive.
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StateCalc Team
Editorial Team
The StateCalc team builds free financial calculators using data from official government sources including the IRS, U.S. Census Bureau, BLS, and state revenue departments. All formulas are validated by an automated test suite and cross-referenced against published data.
Our editorial standardsFrequently Asked Questions
What is the QBI deduction, in plain terms?
It lets owners of sole proprietorships, partnerships, S corporations, and some trusts/estates deduct up to 20% of their qualified business income from their taxable income -- effectively taxing that income at 80% of your normal rate. It's available whether you itemize or take the standard deduction, and is separate from (and in addition to) any other business expense deductions you already claimed.
Is the QBI deduction still around in 2026, or did it expire?
It's still here -- and it's now permanent. Under the original 2017 Tax Cuts and Jobs Act, Sec. 199A was scheduled to sunset after tax year 2025. The One Big Beautiful Bill Act (signed July 2025) removed that sunset, made the 20% deduction permanent, and widened the phase-in ranges (from $100,000/$50,000 to $150,000/$75,000 for joint/other filers) starting in 2026, per IRS Rev. Proc. 2025-32.
What counts as a "specified service trade or business" (SSTB)?
The law lists specific fields: health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, investing/investment management, trading, dealing in securities, and any business where the principal asset is the reputation or skill of one or more of its employees/owners. Notably, engineering and architecture are specifically carved OUT of the SSTB definition and never lose the deduction for that reason alone. Below your threshold amount, the SSTB label doesn't matter at all -- everyone gets the full 20%.
What is the new $400 minimum QBI deduction for 2026?
The One Big Beautiful Bill Act added Sec. 199A(i), guaranteeing a $400 minimum deduction (for tax years beginning after Dec. 31, 2025) to any taxpayer who materially participates in a qualified trade or business with at least $1,000 of QBI -- even if the regular wage/UBIA/SSTB-limited calculation would otherwise produce less (or zero). Both the $400 and $1,000 figures are unindexed for 2026 and begin adjusting for inflation in later years, per IRS Rev. Proc. 2025-32.
Do I need W-2 wages or business property to get this deduction?
Only if your taxable income is above the threshold amount for your filing status. Below the threshold, every qualifying business gets the full 20% QBI deduction regardless of wages paid or property owned. Above the threshold, the wage/UBIA test (and, for SSTBs, a full exclusion) starts to apply -- which is why many very profitable one-person consultancies with no employees see their deduction shrink at higher income levels.
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