QBI Deduction Calculator
| Filing status | Threshold | Phase-in ends |
|---|---|---|
| Married filing jointly | $403,500 | $553,500 |
| Married filing separately | $201,775 | $276,775 |
| Single / head of household | $201,750 | $276,750 |
The section 199A deduction lets pass-through owners shave 20% of qualified business income off taxable income - until income crosses a threshold where the benefit phases out, and for specified service businesses (health, law, consulting, financial services and friends) dies entirely. This calculator runs the 2026 math from the official Rev. Proc. 2025-32 thresholds, including the phase-in window arithmetic that most articles wave at.
The official table carries a quirk the secondary sources keep smearing: married-filing-separately gets a $201,775 threshold while single filers get $201,750 - a deliberate $25 asymmetry that only exists in the revenue procedure itself.
How to use
- Enter taxable income, qualified business income, and whether the business is an SSTB - the status and window do the rest.
- Read the survival percentage inside the phase-in window: it is the share of the full 20% the phase-out leaves you.
- Treat the result as a ceiling: the W-2 wage or basis limit (not modeled) can only reduce it further.
Frequently asked questions
What counts as an SSTB?
Specified service trades: health, law, accounting, actuarial science, performing arts, consulting, athletics, financial and brokerage services, and any business where the principal asset is reputation or skill of employees. Below the threshold the label does not matter; inside the phase-in it determines whether you keep a shrinking slice or lose everything.
Why do my numbers differ from a blog’s 2026 thresholds?
Because the blogs disagree with each other: $201,750 and $201,775 both circulate. The revenue procedure’s own table says $201,750 applies to single and head-of-household filers while $201,775 applies to married-filing-separately - two adjacent lines most summaries collapse into one.
What is the W-2 wage limit?
Above the threshold, the deduction is also capped by wages the business paid: the greater of 50% of W-2 wages, or 25% of wages plus 2.5% of the basis of qualified property. A solo consultant with no employees can be zeroed out by this limit even below the income window - this calculator shows the income-side ceiling only.
Does QBI include my capital gains or wages?
No - QBI excludes capital gains, dividends, interest, and W-2 wages themselves. It is the net income from the trade or business, which is also why the deduction is capped at 20% of taxable income minus net capital gains: the code refuses to let the deduction reach investment income.