QBI Deduction Calculator (Section 199A)
2026Calculate your Qualified Business Income deduction. See 20% deduction with W-2 wage and SSTB limits.
By Konstantin Iakovlev · Updated April 2026 · Source: SBA — Business Guide
QBI Deduction
$30,000.00
Tax Savings
$7,200.00
Base (20% of QBI)
$30,000.00
Deduction Limits
| 20% of QBI | $30,000.00 |
| 50% of W-2 Wages | $40,000.00 |
| 25% of W-2 + 2.5% of UBIA | $22,500.00 |
| W-2 Wage Limit (higher of above) | $40,000.00 |
| 20% of Taxable Income | $40,000.00 |
| Effective QBI Deduction | $30,000.00 |
Phase-Out Status
| Status | Below phase-out — full deduction available |
Use the QBI Deduction Calculator (Section 199A) above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
Section 199A of the tax code grants many self-employed individuals and small business owners a Qualified Business Income deduction, and this tool estimates yours. The deduction works by carving a slice off your taxable income, which for eligible filers can translate into meaningful tax savings without changing how the business actually operates.
The calculation starts from three inputs: your QBI, the W-2 wages your business paid, and the unadjusted basis of qualified property. From there it takes the lesser of 20% of QBI or 20% of taxable income measured before this deduction and before capital gains. Income limitations and the W-2 wage and property tests then come into play, applying differently to specified service trades or businesses (SSTBs) than to non-SSTBs.
Getting the SSTB-versus-non-SSTB classification wrong is one of the surest ways to misstate the deduction, since the two categories follow different rules once income climbs. Watch the taxable income thresholds as well: cross them and the W-2 wage and property limitations kick in, which can shrink the deduction or wipe it out entirely.
Example: Freelance Graphic Designer
- 1 Sarah, a single freelance graphic designer, has $100,000 in QBI, $0 in W-2 wages, $0 in unadjusted basis of qualified property, and a taxable income (before QBI deduction) of $90,000. Her business is not an SSTB.
- 2 The calculator first determines 20% of her QBI ($100,000 * 0.20 = $20,000) and 20% of her taxable income ($90,000 * 0.20 = $18,000). Since her taxable income is below the threshold for W-2 wage and property limitations, the lower of these two amounts is her preliminary deduction.
- 3 Sarah's QBI deduction is $18,000.
- 4 This $18,000 deduction reduces Sarah's taxable income, resulting in a lower tax liability. It's crucial to understand how your business classification and income level affect the available deduction before filing.
Source: SBA — Business Guide · Last updated: April 2026
Frequently Asked Questions
What is the QBI deduction?
What is the income limit for the full QBI deduction in 2026?
Do doctors and lawyers get the QBI deduction?
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