Tax calculator

Free qbi deduction (§199a) calculator

Enter your qualified business income, taxable income, and W-2 wages — this QBI deduction calculator estimates your §199A deduction (20% of QBI) and applies the 2024 income threshold and SSTB rules, updated live, as you type.

On this page10 sections

InputsLive

Gross pay (this period)

Federal income tax rate

Estimate from your tax bracket or W-4.

State income tax rate

Enter 0 if your state has no income tax.

Other deductions

Health insurance, 401(k), etc.

Result

Net pay

$3,267.5

Deductions: $1,732.5 · FICA: $382.5

Net pay$3,267.5

Federal tax$1,100

State tax$250

FICA (SS + Med)$382.5

Estimated only. Actual withholding depends on your W-4 elections, filing status, and local laws. Consult your payroll provider for exact figures.

Results are estimates. Consult a professional.

How it's calculated

How the QBI deduction (§199A) calculator works

The Section 199A qualified business income (QBI) deduction lets eligible self-employed individuals and pass-through business owners deduct up to 20% of their qualified business income on their individual tax return. The deduction was created by the Tax Cuts and Jobs Act (TCJA) of 2017 and is currently scheduled to expire after 2025 unless Congress extends it. The calculation has two tiers: a simple version for taxpayers below the income threshold, and a complex, wages-and-property version above it.

Tentative deduction = 20% × QBI

Overall cap = 20% × (taxable income − net capital gains − qualified dividends)

QBI deduction = min(tentative deduction, overall cap)

Above threshold, non-SSTB: further limited to max(50% × W-2 wages, 25% × wages + 2.5% × unadjusted property basis)

Above threshold, SSTB: deduction phases out and eventually equals $0

IRS — Tax Cuts and Jobs Act, Section 199A deduction for pass-through businesses; Rev. Proc. 2023-34.

Example

Worked example: freelance designer below the income threshold

Example: Single freelancer, $120,000 QBI, $155,000 taxable income

Alex is a single freelance graphic designer filing Schedule C. Alex's qualified business income is $120,000 and taxable income (after the standard deduction) is $155,000. Alex has no capital gains or qualified dividends. The 2024 income threshold for single filers is $191,950, so Alex is below the threshold — the simple calculation applies.

Step 1 — Tentative deduction: 20% × $120,000 = $24,000

Step 2 — Overall cap: 20% × $155,000 = $31,000

Step 3 — QBI deduction = min($24,000, $31,000) = $24,000

$24,000 deduction

Alex's federal taxable income drops by $24,000, saving roughly $5,280 in federal income tax at the 22% marginal rate — with no additional wage or property tests required.

Quick reference

QBI deduction scenarios by income level (2024)

The table below summarizes how the deduction is calculated in each major scenario for 2024. SSTBs (specified service trade or businesses) include professional services such as law, medicine, consulting, financial services, and performing arts.

Scenario	Single filer AGI (2024)	Deduction rule	Result
Below threshold	≤ $191,950	Simple: 20% × QBI (capped at 20% taxable income)	Full 20% if taxable income supports it
Phase-in range (non-SSTB)	$191,951 – $241,950	W-2 wages/property limit phases in	Partial deduction; wages matter
Above threshold (non-SSTB)	> $241,950	50% of W-2 wages OR 25% wages + 2.5% property	Limited by payroll or property
Phase-in range (SSTB)	$191,951 – $241,950	Deduction phases out proportionally	Partial deduction
Above threshold (SSTB)	> $241,950	Deduction fully phased out	$0 deduction
Below threshold (MFJ)	≤ $383,900	Simple: 20% × QBI	Full 20%
Above threshold (MFJ)	> $483,900	Non-SSTB: wage/property limit; SSTB: $0	Depends on wages and property

Source: IRS §199A; IRS Rev. Proc. 2023-34. Phase-in range for MFJ: $383,901–$483,900.

Practical tips

Tips for the QBI deduction

The QBI deduction interacts with nearly every other line on your return. A few planning moves can dramatically change the result — especially if you are near the income thresholds.

Maximize retirement contributions to reduce taxable income. Contributions to a SEP-IRA, Solo 401(k), or SIMPLE IRA are deducted before the threshold test, potentially keeping you below $191,950 / $383,900 and preserving the full 20% deduction.
If you are an SSTB above the threshold, consider entity and income restructuring. Splitting a service business from a product or property business may allow the non-SSTB portion to claim the deduction. Get professional advice before restructuring.
Paying yourself W-2 wages from an S-corp can unlock the deduction above the threshold. For non-SSTBs, the deduction is limited to 50% of W-2 wages paid — so S-corp owners with no employees may lose out unless they pay themselves a reasonable wage.
Track unadjusted basis of qualified property. For non-SSTBs above the threshold, the alternative W-2 formula (25% wages + 2.5% property) can help if you have significant depreciable assets used in the business.
Note the 2025 sunset. Section 199A expires after December 31, 2025, unless extended. Multi-year income planning before the deadline may make sense if you expect higher income in 2026 and the provision is not renewed.

Accuracy & limits

Accuracy and limitations

This calculator applies the 2024 income thresholds ($191,950 single / $383,900 MFJ) and the simple 20%-of-QBI formula for filers below the threshold, and the W-2 wage limitation above it. It does not calculate the phase-in reduction for filers within the $50,000 ($100,000 MFJ) phase-in corridor — for those taxpayers, the result is an approximation. Losses in one business reduce QBI from others and can carry forward; this tool does not model multi-entity or prior-year-loss scenarios.

The §199A regulations run to hundreds of pages (see IRS Form 8995 and 8995-A instructions). If your situation involves an SSTB above the income threshold, multiple businesses, losses, or aggregation elections, the calculator should be used as an orientation tool only — not as a substitute for a CPA or enrolled agent.

Glossary

QBI deduction terms defined

Net income, gain, deduction, and loss from a domestic qualified trade or business operated as a sole proprietorship, partnership, S-corp, or trust. Excludes W-2 wages, capital gains, dividends, and interest income.

A business in a field where the principal asset is the skill or reputation of its employees — including law, medicine, accounting, consulting, financial services, and performing arts. SSTBs above the income threshold receive no §199A deduction.

Above the income threshold, the §199A deduction for non-SSTBs may not exceed 50% of W-2 wages paid to employees by the business, or an alternative 25%-of-wages plus 2.5%-of-qualified-property test, whichever is greater.

The original purchase price of depreciable tangible property still in its depreciable life, used in the alternative W-2 limitation formula.

The $50,000 corridor above the income threshold ($100,000 for MFJ) over which the SSTB disqualification and the W-2 limitation gradually phase in rather than applying all at once.

The §199A deduction cannot exceed 20% of (taxable income minus net capital gains and qualified dividends), preventing the deduction from sheltering income already taxed at preferential capital-gains rates.

IRS forms used to calculate the §199A deduction. Form 8995 is the simplified version for taxpayers below the threshold; Form 8995-A is the detailed version for those above it or with multiple businesses.

About

About this QBI deduction calculator

This calculator runs entirely in your browser — nothing you enter is sent to any server.

Browse more in our tax calculators, or explore the complete library on the free calculators page.

Questions

Frequently asked questions about the free qbi deduction (§199a) calculator

A QBI deduction (§199A) calculator is a free online tool that helps you calculate the Qualified Business Income deduction for pass-through entities. 20% of QBI deduction for sole props, S-corps, partnerships. SSTBs phase out. It runs entirely in your browser with instant results and no sign-up.

No — these are simplified estimates based on 2024 brackets. Real tax filing requires considering all your deductions, credits, AMT, state taxes, and the latest IRS guidance. Use professional tax software or a CPA for filing.

Marginal rate is what you pay on your next dollar of income. Effective rate is total tax ÷ total income — typically much lower because of the progressive brackets and deductions.

Federal only. State tax varies by jurisdiction; some states have no income tax (TX, FL, WA, etc.), others up to 13%+ (CA, NY). Add state tax separately based on your state.