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QBI Deduction Calculator

Calculate your Section 199A Qualified Business Income deduction with W-2 wage limits, UBIA property tests, and SSTB phase-out rules for 2024.

About this calculator

This calculator computes the Section 199A deduction pass-through business owners can claim against Qualified Business Income (QBI), using the 2024 phase-out thresholds the IRS published in Rev. Proc. 2023-34 ($191,950 to $241,950 single, $383,900 to $483,900 MFJ). Below the threshold, the deduction is a straightforward 20% of QBI (capped at 20% of taxable income). Above it, the deduction is limited to the greater of 50% of W-2 wages paid by the business, or 25% of wages plus 2.5% of UBIA (the unadjusted basis of qualifying property) -- and for a Specified Service Trade or Business (SSTB) like law, medicine, or consulting, the deduction phases out to zero entirely once Total Taxable Income clears the top of the range.

QBI drives the tentative 20% deduction directly and dominates Tentative Deduction (20%) outright, since that figure is a pure 20% multiple of QBI with no other input involved at all. Raising Total Taxable Income has the opposite effect on Effective QBI Deduction Rate that you might expect at first: since it pushes you further into the phase-in range where the W-2/UBIA limitation increasingly caps the deduction, more taxable income can mean a LOWER deduction as a share of QBI, not higher. W-2 Wages Paid by the Business only matters once you're in or past the phase-out range -- it raises the W-2/UBIA Limit but has no bearing on the deduction below the threshold. This model doesn't cover REIT dividends or publicly traded partnership income, which get the 20% deduction without any wage or income limitation at all.

Inputs

$
$
$
$

Results

QBI Deduction (Section 199A)

$29,195.00

≈ 15 gaming PCs

Estimated Tax Savings

$7,007.00

≈ 7 smartphones

Effective QBI Deduction Rate19.46%
Tentative Deduction (20%)$30,000.00
W-2 / UBIA Limit$25,000.00
Taxable Income Limit (20%)$40,000.00

Figures current as of 2024. Source: IRC § 199A; IRS Rev. Proc. 2023-34, § 3.27 (2024 threshold amounts under § 199A(e)(2): $191,950 single/MFS, $383,900 MFJ; phase-in range amounts under § 199A(b)(3)(B) and § 199A(d)(3)(A): $241,950 single/MFS, $483,900 MFJ)

How to Use This Calculator
  1. Enter Qualified Business Income from your pass-through entity (sole prop, partnership, S-corp, or LLC).
  2. Set Total Taxable Income — the phase-out range begins at $191,950 single / $383,900 MFJ (2024).
  3. Enter W-2 Wages Paid by the business — the W-2 wage limitation applies above the phase-out range.
  4. Set UBIA (unadjusted basis of qualified property) if you have significant depreciable business assets.
  5. Select Specified Service Business (SSTB) — law, medicine, consulting, and other SSTBs lose the deduction above the phase-out.
  6. Review QBI Deduction (Section 199A) and Estimated Tax Savings.

How the result changes with Qualified Business Income ($)

Qualified Business Income ($)QBI Deduction (Section 199A)Estimated Tax Savings
$75,000.00$15,000.00$3,600.00
$112,500.00$22,500.00$5,400.00
$225,000.00$40,000.00$9,600.00
$375,000.00$40,000.00$9,600.00

What each input means

Qualified Business Income ($)
Net income from your pass-through business (sole proprietorship, partnership, S-corp, or LLC).
Total Taxable Income ($)
Your taxable income before the QBI deduction. Determines phase-out and 20% cap. Uses 2024 thresholds ($191,950 single / $383,900 MFJ).
W-2 Wages Paid by Business ($)
Total W-2 wages paid by the qualifying business (including your own if S-corp).
UBIA of Qualified Property ($)
Unadjusted basis immediately after acquisition of depreciable business property (within depreciable period).
Filing Status
Determines the income threshold where W-2/UBIA limitations begin.
Specified Service Business (SSTB)?
SSTBs (law, medicine, consulting, etc.) lose the deduction entirely above the phase-out range.

What each result means

QBI Deduction (Section 199A)
Your qualified business income deduction after all limitations.
Estimated Tax Savings
Approximate tax savings assuming a 24% marginal rate.
Effective QBI Deduction Rate
Your actual deduction as a percentage of QBI (max 20%).
Tentative Deduction (20%)
20% of QBI before any wage, UBIA, or income limitations.
W-2 / UBIA Limit
Greater of 50% of W-2 wages or 25% of wages + 2.5% of UBIA.
Taxable Income Limit (20%)
20% of taxable income cap on the QBI deduction.

How this is calculated

Worked example, using the default values

  1. Identify Input Parameters
    4 parameters
    Qualified Business Income ($) = 150000, Total Taxable Income ($) = 200000, W-2 Wages Paid by Business ($) = 50000, UBIA of Qualified Property ($) = 0 = 6 input(s) provided
  2. Calculate QBI Deduction
    QBI Deduction
    29195 = $29,195
  3. Calculate Estimated Tax Savings
    Estimated Tax Savings = qbiDeduction * 0.24
    7007 = $7,007
  4. Calculate Effective QBI Deduction Rate
    19.46 = 19.46%
  5. Calculate Tentative Deduction
    Tentative Deduction = qbi * 0.20
    30000 = $30,000

Figures and sources

Engine last updated . Checked against 3 independently-derived tests — how we verify calculators. Built by Paul Gunder, a software engineer, not a licensed financial, medical, or legal professional.

Frequently Asked Questions

Why does more taxable income sometimes shrink my effective QBI rate?

Below the 2024 phase-out threshold ($191,950 single / $383,900 MFJ), the deduction is a clean 20% of QBI. Once Total Taxable Income crosses that line, the wage/UBIA limitation phases in and increasingly caps the deduction below the full 20% -- so pushing further into the phase-in range with more taxable income can lower Effective QBI Deduction Rate even while QBI itself stays fixed.

Why does QBI dominate the Tentative Deduction so completely?

Tentative Deduction (20%) is calculated as exactly qbi times 0.20 with no other input in the formula at all -- Total Taxable Income, W-2 Wages, UBIA, Filing Status, and SSTB status only come into play afterward, when the wage/UBIA limitation and taxable-income cap get applied to bring the tentative figure down to the final QBI Deduction.

What happens to my deduction if my business is a Specified Service Trade or Business (SSTB)?

Below the phase-out threshold, an SSTB gets the full 20% deduction just like any other business. Once Total Taxable Income clears the top of the 2024 phase-out range ($241,950 single / $483,900 MFJ), an SSTB's QBI Deduction drops to zero entirely -- law, medicine, consulting, and other listed service fields lose the deduction completely at high income, while non-SSTB businesses only face the W-2/UBIA wage limitation instead.

When does W-2 Wages Paid by the Business actually matter?

Only once you're in or above the phase-out range. Below the threshold, the deduction is a flat 20% of QBI regardless of wages paid. Above it, W-2 Wages Paid directly sets the W-2/UBIA Limit (the greater of 50% of wages, or 25% of wages plus 2.5% of UBIA), which increasingly caps how much of the tentative 20% deduction you actually get to keep.

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