Free QBI Deduction Calculator (IRC §199A)
Enter your filing status, taxable income, and qualified business income on the left. The diagram below traces the full §199A computation — including the §199A(b)(3)(B) phase-in, §199A(b)(2)(B) wage and UBIA caps, SSTB phase-out under §199A(d)(3), and the flat 20% deduction on REIT and PTP income — using PolicyEngine US.
Enter your inputs on the left and click Calculate to see the §199A computation diagram.
Frequently asked questions
What is the QBI deduction?
The Qualified Business Income (QBI) deduction is a 20% deduction on net income from pass-through businesses created by IRC §199A. It is available to sole proprietors, partnerships, S-corporations, and certain trusts and estates.
Who qualifies for the §199A deduction?
Owners of a qualified trade or business — a §162 trade or business other than the trade or business of being an employee — with taxable income above zero. Above the §199A(e) threshold, additional W-2 wage and UBIA limitations apply, and Specified Service Trades or Businesses (SSTBs) phase out.
What is an SSTB?
A Specified Service Trade or Business under §199A(d)(2) — health, law, accounting, actuarial, performing arts, consulting, athletics, financial / brokerage services, investing, or any business whose principal asset is the reputation or skill of its owners. SSTB income phases out above the §199A threshold.
What are the W-2 wage and UBIA limits?
Above the threshold, the QBI component for each business is capped at the greater of (a) 50% of W-2 wages paid by the business, or (b) 25% of W-2 wages plus 2.5% of the unadjusted basis immediately after acquisition (UBIA) of qualified property — see §199A(b)(2)(B).
What is the difference between Form 8995 and Form 8995-A?
Form 8995 is the simplified form for filers with taxable income below the §199A threshold. Form 8995-A is the longer form required when taxable income exceeds the threshold and the wage / UBIA limits or SSTB phase-out apply.