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    Tax / Pass-through

    QBI Deduction (199A) Calculator

    The §199A deduction is 20 % of qualified business income, capped by taxable income and — above the threshold — by W-2 wages and depreciable property. A specified service business loses it entirely at the top of the phase-in range.

    QBI deduction$30,00020 % tentative$50,000Wage / UBIA limit$30,000
    QBI deduction
    $30,000
    12.0% of QBI
    20 % tentative
    $50,000
    Before the wage limit
    Wage / UBIA limit
    $30,000
    50 % wages or 25 % + 2.5 % UBIA
    Phase-in consumed
    100%
    Fully phased in
    Limitation
    The deduction is the lesser of the tentative amount and the wage/property limit above the threshold.
    Limitation
    TermAmount
    Qualified business income$250,000
    20 % of QBI$50,000
    Taxable income cap$60,000
    W-2 wage limit$30,000
    Wage + property limit$17,500
    Deduction$30,000

    A non-SSTB keeps the wage-limited deduction at any income.

    Inspect the model
    Choose a quick result view, a scaled comparison, or the complete diagnostic set.
    Deduction against taxable income
    The cap binds where the line flattens.
    Deduction against taxable income0.0009038.401.808e+42.712e+43.615e+44.519e+4$0.00$0.00$75,000$75,000$150,000$150,000$225,000$225,000$300,000$300,000$375,000$375,000$450,000$450,000$525,000$525,000$600,000$600,000Deduction
    Canonical equations
    The exact relationships implemented by this engine.

    20 % × min(QBI, taxable income) · §199A(a).

    max(50 % W-2, 25 % W-2 + 2.5 % UBIA) · Above the threshold.

    deduction × (1 − excess / phase-in) · Zero at the top of the range.

    finance methodology

    A clear path from inputs to results.

    The §199A deduction is 20 % of qualified business income, capped by taxable income and — above the threshold — by W-2 wages and depreciable property. A specified service business loses it entirely at the top of the phase-in range.

    Step-by-step methodWorked exampleAssumptions explained

    How to use

    1. Set qualified business income.
    2. Set taxable income before the qbi deduction.
    3. Set filing status.
    4. Set w-2 wages paid by the business.
    5. Read the headline metrics, then check the table for the detail.

    The formula

    D=min⁡(0.2 QBI,  0.2 TI,  W)D = \min(0.2\,QBI,\; 0.2\,TI,\; W)

    Reference: IRC §199A; IRS Rev. Proc. 2025-32 §3.26 for the 2026 thresholds.

    Worked example

    At the default inputs

    Inputs
    • Qualified business income: 250000; Taxable income before the QBI deduction: 300000; Filing status: single; W-2 wages paid by the business: 60000; Depreciable property (UBIA): 100000; Specified service business?: no
    Calculation path
    1. 1

      Tentative 20 % → $50,000 Wage limit → $30,000 Phase in → $30,000

    Result

    QBI deduction: $30,000 · 20 % tentative: $50,000 · Wage / UBIA limit: $30,000

    Interpreting the result

    On $250,000 of QBI a SINGLE filer gets a $30,000 deduction — limited by wages and property, with 100% of the phase-in used.

    Assumptions & limitations

    • Taxable income is before the QBI deduction.
    • W-2 wages and UBIA are the business own.
    • The $400 minimum applies below the threshold.

    Frequently asked questions

    Why is my deduction lower than 20%?

    Above the threshold the wage/property limit binds, and an SSTB phases out.

    Does a sole proprietor have W-2 wages?

    Usually no, which is why the wage limit bites.

    Methodology last reviewed 2026-10-23. Results are informational and not financial or engineering advice — see our disclaimer.