QBI Deduction Calculator 2025 β Section 199A Qualified Business Income
Calculate your Section 199A QBI deduction. Handles SSTB phase-outs, W-2 wage limits, and qualified property limits for 2025.
$
Net profit from your business (Schedule C, K-1, S-Corp) $
After all deductions (including standard deduction) $
Wages you paid employees (0 if sole proprietor) $
Unadjusted basis of qualified depreciable property $0
QBI Deduction
0%
% of QBI Deducted
$0
Est. Tax Savings
β
Phase-Out Status
QBI Deduction Calculation
How to Use This QBI Deduction Calculator
Enter your qualified business income β net profit from your pass-through business (Schedule C, partnership, S-Corp). Then enter your total taxable income (after deductions) which determines if phase-out rules apply.
Select SSTB if your business is in law, accounting, health, consulting, financial services, brokerage, actuarial science, performing arts, or athletics.
The Formula
Basic deduction = QBI Γ 20%
W-2 wage limit = max(W-2 wages Γ 50%, W-2 wages Γ 25% + qualified property Γ 2.5%)
SSTB phase-out range: $191,950β$241,950 (single) / $383,900β$483,900 (MFJ)
Final deduction = min(basic deduction, W-2 wage limit if applicable) Γ phase-out factor
Overall cap = 20% Γ (taxable income β net capital gains)
W-2 wage limit = max(W-2 wages Γ 50%, W-2 wages Γ 25% + qualified property Γ 2.5%)
SSTB phase-out range: $191,950β$241,950 (single) / $383,900β$483,900 (MFJ)
Final deduction = min(basic deduction, W-2 wage limit if applicable) Γ phase-out factor
Overall cap = 20% Γ (taxable income β net capital gains)
Example
Maria, Single, freelance consultant (non-SSTB), QBI = $80,000, taxable income = $90,000:
Basic 20% deduction: $80,000 Γ 20% = $16,000
Taxable income ($90,000) is below $191,950 threshold β no phase-out, no W-2 wage limit
Overall cap: $90,000 Γ 20% = $18,000
QBI deduction = $16,000
At 22% marginal rate: saves approximately $3,520 in federal tax
Basic 20% deduction: $80,000 Γ 20% = $16,000
Taxable income ($90,000) is below $191,950 threshold β no phase-out, no W-2 wage limit
Overall cap: $90,000 Γ 20% = $18,000
QBI deduction = $16,000
At 22% marginal rate: saves approximately $3,520 in federal tax
Extended
SSTB vs Non-SSTB Comparison
Compare your QBI deduction under different business classifications and income scenarios
Compare your QBI deduction if your business is classified as SSTB vs non-SSTB at various income levels.
SSTB vs Non-SSTB Comparison (at your QBI & filing status)
| Taxable Income | Non-SSTB Deduction | SSTB Deduction | Difference |
|---|
W-2 Wage & Property Limit Impact
Frequently Asked Questions
What is the QBI deduction (Section 199A)?
The Qualified Business Income (QBI) deduction allows eligible self-employed individuals and small business owners to deduct up to 20% of their qualified business income from their taxable income. It was created by the Tax Cuts and Jobs Act of 2017 and is currently set to expire after 2025 unless extended.
What is an SSTB and how does it affect my deduction?
Specified Service Trade or Business (SSTB) includes fields like law, accounting, health, consulting, financial services, and performing arts. For SSTBs, the 20% deduction phases out when taxable income exceeds $191,950 (single) or $383,900 (married filing jointly) in 2025, and is eliminated entirely $50,000 above those thresholds.
How is the QBI deduction limited by W-2 wages?
For non-SSTB businesses above the phase-out threshold, the deduction is limited to the greater of: 50% of your W-2 wages paid by the business, or 25% of W-2 wages plus 2.5% of qualified property. This prevents high-income owners with no employees from claiming the full deduction.
Can I claim QBI if I have a regular job and side business?
Yes. The QBI deduction applies to income from your qualified trade or business, not your W-2 wages. If you have a side business filing on Schedule C, partnership K-1, or S-Corp, that income can qualify. Your total taxable income (including W-2 wages) determines which limits apply.
When does the QBI deduction expire?
The Section 199A QBI deduction is scheduled to expire after December 31, 2025. Congress may extend or make it permanent, but as of now you should plan around the potential expiration. If it expires, business owners could see their taxable income increase significantly starting in 2026.