Question 1

What is the QBI deduction (Section 199A)?

Accepted Answer

The QBI deduction (Section 199A) allows self-employed individuals, sole proprietors, and pass-through business owners to deduct up to 20% of their qualified business income. This is an above-the-line deduction that reduces taxable income without itemizing.

Question 2

What is the QBI deduction income limit for 2026?

Accepted Answer

For 2026, the QBI deduction begins to phase out at $191,950 for single filers and $383,900 for married filing jointly. Below these thresholds, you generally qualify for the full 20% deduction regardless of your business type. Above these amounts, additional W-2 wage and UBIA limits may apply.

Question 3

Can I take the QBI deduction if I have a specified service business (SSTB)?

Accepted Answer

Yes, if your taxable income is below $191,950 (single) or $383,900 (MFJ). SSTBs include doctors, lawyers, accountants, consultants, and financial advisors. Above these thresholds, the deduction for SSTBs is gradually reduced and fully eliminated at $241,950 (single) or $433,900 (MFJ).

Question 4

How do I calculate my QBI deduction?

Accepted Answer

Your QBI deduction is the lesser of: 20% of your qualified business income, or 20% of your taxable income (before the QBI deduction). If your income exceeds the phase-out threshold and you don't have an SSTB, the deduction is also limited to the greater of 50% of W-2 wages or 25% of W-2 wages plus 2.5% of UBIA (unadjusted basis of qualified property).

QBI Deduction Calculator