QBI Deduction Calculator
If you earn income through a sole proprietorship, LLC, S-corp, or partnership, up to 20% of that profit may escape federal income tax entirely — the Qualified Business Income (QBI) deduction. This calculator shows your deduction and what it saves.
How to use this calculator
- Enter qualified business income (your share of profit).
- Enter taxable income (before QBI).
- Enter your marginal tax rate.
- Your results appear instantly below and update as you change the numbers.
How this calculator works
The QBI deduction equals 20% of your pass-through profit, capped at 20% of your taxable income after other deductions. It is a deduction, not a credit — it lowers taxable income rather than tax directly. Example: $50,000 of profit and $60,000 of taxable income yields a $10,000 deduction, worth $2,200 at a 22% rate. A key limit: specified service businesses (law, medicine, consulting, accounting, finance, performing arts) start phasing out above $201,775 of taxable income (single) or $403,500 (joint) in 2026 — so a six-figure solo practice often gets a partial or zero QBI deduction.
Frequently asked questions
Does the deduction apply to W-2 income?
No — only business income from pass-through entities. Salaries, even from your own S-corp, do not qualify; only the business profit passed through to you does.
What about specified service businesses?
Law, medicine, accounting, consulting, financial services, and similar professions phase out of the deduction above income thresholds that are adjusted yearly — check the current threshold for your filing status and income before relying on the full 20%.
Does it reduce self-employment tax?
No — QBI is an income tax deduction only. Self-employment tax is calculated separately on your net earnings and is unaffected by it.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect 2026 rules and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: IRS.gov · 2026 limits per IRS tax inflation adjustments.