Free small business calculator
QBI Deduction Calculator
Estimate your 2026 Section 199A QBI deduction, including simplified SSTB phase-outs above $201,750 (most returns) / $403,500 (joint).
Enter the minimum numbers needed to get a result.
Updated live as you type.
Planning estimate only. It does not include taxes, overhead allocation, depreciation, discounts, or other business-specific adjustments.
The QBI deduction (Section 199A) lets owners of pass-through businesses deduct up to 20% of qualified business income. Made permanent by OBBBA in 2025, it is limited by taxable income and, at higher incomes, by business type and wages.
Formula and example
QBI Deduction = min(20% × Qualified Business Income, 20% × Taxable Income). In this simplified 2026 model, SSTBs phase out from $201,750–$276,750 for most returns and $403,500–$553,500 for joint returns.
With $80,000 of business income and $95,000 taxable income (under the 2026 threshold): 20% of QBI is $16,000 and 20% of taxable income is $19,000, so the simplified estimate is $16,000.
Related tools
Estimate self-employment tax, a rough quarterly reserve, and take-home pay as a 1099 contractor.
Estimate a rough quarterly tax reserve and review the major limitations.
Estimate home office, equipment, travel, health insurance, and retirement deductions. See tax savings with side-by-side comparison.
Methodology & assumptions
Last updated: 2026-07-29Calculation method
Estimates the Section 199A deduction using 2026 thresholds from IRS Rev. Proc. 2025-32. The deduction is generally limited by both qualified business income and taxable income; higher-income SSTB and non-SSTB rules require additional inputs this simplified tool does not collect.
Data sources
Uses the numbers you enter and standard small-business finance formulas. Benchmark comparisons use HustleFin industry benchmark pages where available.
Limitations
Planning estimate only. Above-threshold non-SSTB W-2 wage/UBIA limits are not modeled, and the tool omits net-capital-gain adjustments, REIT/PTP income, aggregation, and loss carryforwards. Consult a CPA or EA.
Input definitions
- Qualified business income: Net profit from your pass-through business (sole prop, LLC, S-corp, partnership) after expenses.
- Taxable income (before QBI): Your total taxable income before this deduction, after the standard or itemized deduction.
- Filing status: 0 = single / other, 1 = married filing jointly. Sets the income threshold where limits begin.
- Specified service business?: 1 = yes (health, law, accounting, consulting, financial, performing arts, athletics), 0 = no. Only matters above the income threshold.
- Federal marginal tax rate: Your top federal income tax bracket, used to estimate dollars saved.
Frequently asked questions
Who qualifies for the 20% QBI deduction?+
Owners of qualifying pass-through businesses may deduct up to 20% of qualified business income, subject to taxable-income and other limits. For 2026, the threshold is $201,750 for most returns and $403,500 for married filing jointly.
What is an SSTB and why does it matter?+
A Specified Service Trade or Business includes categories such as health, law, accounting, consulting, financial services, performing arts, and athletics. In the simplified 2026 model, the phase-out spans $201,750–$276,750 for most returns and $403,500–$553,500 for joint returns.
Is the QBI deduction still available after 2025?+
Yes. The Section 199A QBI deduction was scheduled to expire after 2025, but the One Big Beautiful Bill Act made it permanent. That removes the prior expiration and keeps the 20% pass-through deduction in place for future tax years.
Does QBI reduce my self-employment tax?+
No. The QBI deduction reduces your federal income tax by lowering taxable income, but it does not reduce self-employment tax (the 15.3% Social Security and Medicare tax). Self-employment tax is calculated on net earnings before the QBI deduction.
Why might my allowed deduction be less than 20% of my business income?+
Because the deduction is also capped at 20% of your taxable income (excluding net capital gains). If your taxable income is close to or below your business income — for example after the standard deduction — the taxable-income cap, not the 20% of QBI, becomes the binding limit.
Related guides
Go deeper with in-depth guides on the concepts behind this calculator.
Next: What to do after this
Pick one next action. These are sequenced by the most common workflow after this calculation.
Continue the workflow
Estimate margin, convert margin to markup, then check the sales volume needed to break even.
Profit Margin Calculator
Calculate profit, margin percentage, and pricing health from cost and revenue.
Gross Margin Calculator
Calculate gross profit and gross margin from revenue and COGS.
Markup Calculator
Calculate selling price, markup, profit, and margin from cost.