Free small business calculator
QBI Deduction Calculator
Estimate your Section 199A Qualified Business Income deduction — up to 20% of pass-through business income, made permanent by the 2025 One Big Beautiful Bill Act. Limited to 20% of taxable income, with SSTB phase-outs above $197,300 (single) / $394,600 (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.
What this calculator means
QBI Deduction: 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). Above the income threshold, SSTBs phase out over a $50,000 (single) / $100,000 (joint) range.
With $80,000 of business income and $95,000 taxable income (single, under the $197,300 threshold): 20% of QBI is $16,000 and 20% of taxable income is $19,000, so the allowed deduction is $16,000 — saving about $3,520 at a 22% rate and cutting taxable income to $79,000.
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Methodology & assumptions
Last updated: 2026-06-21Calculation method
Estimates the Section 199A Qualified Business Income (QBI) deduction, which the One Big Beautiful Bill Act made permanent in 2025. The deduction is generally 20% of qualified business income from pass-through entities, capped at 20% of taxable income (excluding net capital gains). Below the 2025 taxable-income thresholds of $197,300 (single) / $394,600 (joint), the full 20% applies regardless of business type. Above the threshold, Specified Service Trades or Businesses (SSTBs) phase out over a $50,000 (single) / $100,000 (joint) range.
Data sources
Uses the numbers you enter and standard small-business finance formulas. Benchmark comparisons use HustleFin industry benchmark pages where available.
Limitations
Estimate only, not tax advice. For incomes above the threshold, non-SSTB businesses are further limited by W-2 wages paid and the unadjusted basis of qualified property (UBIA) — those limits are not modeled here, so high-income non-SSTB results may be overstated. Excludes net capital gains from the taxable-income limit and does not handle REIT/PTP income, aggregation, or losses carried forward. 2025 thresholds shown; confirm current-year figures on IRS.gov.
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 pass-through businesses — sole proprietors, single-member LLCs, partnerships, and S-corporations — can deduct up to 20% of qualified business income. Below the 2025 thresholds of $197,300 (single) / $394,600 (joint), almost any business type qualifies for the full deduction.
What is an SSTB and why does it matter?+
A Specified Service Trade or Business includes health, law, accounting, consulting, financial services, performing arts, and athletics. Below the income threshold, SSTB status does not matter. Above it, the SSTB deduction phases out over $50,000 (single) / $100,000 (joint) and disappears entirely at the top of that range.
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.
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