US QBI Deduction Calculator
This QBI deduction calculator estimates your Section 199A deduction from QBI, taxable income and filing status, with the W-2 wage limit above the threshold.
What it does
The US QBI Deduction Calculator estimates the Section 199A qualified business income deduction from your QBI, taxable income, and filing status.
Data sources & parameters
The figures below drive this calculator. We keep them aligned with the latest official guidance, and each result recalculates automatically whenever a value changes.
| Parameter | Value | Source | Last updated |
|---|---|---|---|
| QBI deduction rate | 0.2 | irs.gov | Effective 2026-01-01QBI (Section 199A) deduction rate |
| QBI W-2 wage limit share | 0.5 | law.cornell.edu | Effective 2026-01-01QBI W-2 wage limit (50% of W-2 wages) |
| QBI taxable-income threshold, single | 201,750 | irs.gov | Effective 2026-01-01Corrected 2026-09-06 from 201775 to 201750 against Rev. Proc. 2025-32 s4.26: all other returns $201,750. The 201775 held was the married-filing-separately figure. |
| QBI taxable-income threshold, married joint | 403,500 | irs.gov | Effective 2026-01-01Corrected 2026-09-06 from 403550 to 403500 against Rev. Proc. 2025-32 s4.26: the IRC 199A(e)(2) threshold for a joint return is $403,500 for 2026. |
| QBI phase-in range width, single/HOH/MFS | 75,000 | irs.gov | Effective 2026-01-01Fix 2026-10-24: the row went live with country_code AU, so Resolver never saw it and the key fell back to the tool.json default. Value unchanged. |
| QBI phase-in range width, married joint | 150,000 | irs.gov | Effective 2026-01-01Fix 2026-10-24: the row went live with country_code AU, so Resolver never saw it and the key fell back to the tool.json default. Value unchanged. |
| QBI taxable-income threshold, married filing separately | 201,750 | irs.gov | Effective 2026-01-01Fix 2026-10-24: wrong country_code AU (the row was dead) and the threshold is half the joint 403,500, not the unmarried boundary. |
| QBI phase-in range width, married filing separately | 75,000 | irs.gov | Effective 2026-01-01Fix 2026-10-24: the row went live with country_code AU, so Resolver never saw it and the key fell back to the tool.json default. Value unchanged. |
| QBI wage-plus-capital test, W-2 wage share | 0.25 | law.cornell.edu | Effective 2026-01-01Fix 2026-10-24: the row went live with country_code AU, so Resolver never saw it and the key fell back to the tool.json default. Value unchanged. |
| QBI wage-plus-capital test, UBIA share | 0.025 | law.cornell.edu | Effective 2026-01-01Fix 2026-10-24: the row went live with country_code AU, so Resolver never saw it and the key fell back to the tool.json default. Value unchanged. |
| QBI minimum deduction (section 199A(i)) | 400 | irs.gov | Effective 2026-01-01Fix 2026-10-24: the row went live with country_code AU, so Resolver never saw it and the key fell back to the tool.json default. Value unchanged. |
| Minimum qualified business income for the section 199A(i) minimum deduction | 1,000 | irs.gov | Effective 2026-01-01Fix 2026-10-24: the row went live with country_code AU, so Resolver never saw it and the key fell back to the tool.json default. Value unchanged. |
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Deduction = min(20% × QBI, 20% × taxable income); above threshold also min(50% × W-2 wages)
How it works
It takes 20% of your QBI, caps it at 20% of taxable income, and — above the income threshold — also caps it at 50% of the business's W-2 wages.
Where it is used
- Estimating the Section 199A QBI deduction
- Seeing when the W-2 wage limit begins to apply
- Comparing the deduction across filing statuses
Worked example
On $100,000.00 of QBI with $150,000.00 taxable income as a single filer, the QBI deduction is ….
What the QBI deduction calculator does
The calculator estimates your Section 199A qualified business income deduction from the QBI you earned, your taxable income before the deduction, and your filing status. If your income is near or above the threshold, also enter the W-2 wages paid by the business that generates the QBI. The tool applies 20% to your QBI, caps that at 20% of your taxable income and, once your income passes the threshold, also applies the 50% W-2 wage limit. The result is an estimate of the deduction you may be able to claim on Form 8995 or 8995-A, and it shows when the wage limit starts to reduce it.
How the deduction is calculated
- The tentative deduction is 20% of your qualified business income.
- It is capped at 20% of your taxable income, excluding net capital gain.
- Above the taxable-income threshold for your filing status, it is also capped at 50% of the business's W-2 wages.
- The final deduction is the smallest of these limits.
The 20% rate, the 50% wage share and the filing-status thresholds are stored as parameters and updated when they change. Below the threshold the wage limit does not apply, and the deduction is the lesser of 20% of QBI and 20% of taxable income.
What counts as qualified business income
Qualified business income is generally the net income from a qualified trade or business run as a pass-through: a sole proprietorship, partnership, S corporation, or many LLCs. It is the ordinary income the business generates, after ordinary deductions, that flows through to your personal return.
Wages you receive as an employee, guaranteed payments to partners, reasonable compensation paid to an S corporation owner, and most capital gains, dividends and interest income are not QBI. The definition sets the base of the deduction, so identify what counts before relying on an estimate. If your business has several activities, each may need to be looked at separately.
The taxable-income threshold and the wage limit
Below the threshold for your filing status, the deduction is 20% of QBI, capped only by 20% of taxable income. That covers most small business owners.
Above the threshold, the deduction can no longer exceed 50% of the W-2 wages the business pays, so a business with little or no payroll can see its deduction shrink at higher incomes. An alternative measure based on wages plus a share of qualified property can help capital-intensive businesses; this tool uses the wage limit only. Between the threshold and a higher figure is a phase-in range over which these limits gradually take effect, so the estimate is most reliable when your income is clearly below or clearly above the threshold. If you are above it, enter the wage figure for the right business carefully, because it can decide the result. Below it, the wage field has little effect.
Why filing status matters
Filing status sets your threshold, and the threshold decides when the wage limit applies. A married couple filing jointly generally has a much higher threshold than a single filer, so the same business income can be treated very differently. For couples, the choice between filing jointly and separately can change where they sit relative to the threshold.
Reading your result
The output leads with your estimated QBI deduction, then shows the tentative 20% of QBI, the taxable-income limit, the W-2 wage limit, and whether your income is above the threshold. Comparing these shows which limit sets your result and how much room you have before another cap applies.
Specified service businesses, the wages-plus-property alternative, aggregation elections, and losses carried between businesses can all change the outcome. Rerun the estimate when your business income, taxable income or wages change, or to plan payroll and income timing around the threshold, and confirm specifics with a tax professional before filing.
This is general information only and not financial advice.
About This QBI Deduction Calculator
Use this QBI deduction calculator to get an instant, accurate estimate. The figures follow official IRS guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Tax year 2026
Frequently asked questions
What is the QBI deduction?
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