Section 199A qualified business income deduction. Below the income threshold it is simply twenty percent; above it, wage limits apply and service businesses lose it entirely.
Also called: section 199a calculator, pass through deduction.
$36,000.00, worth $8,640.00 at your marginal rate. The base 20 percent would be $36,000.00, limited to $39,000.00 by the taxable income cap. Not a specified service business, so only the wage limitation applies above the threshold.
Computed from the published rates for the tax year you selected, which is not necessarily the current year. A calculation, not tax advice, and it does not know anything about your circumstances beyond the figures entered.
This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.
The deduction is twenty percent of qualified business income, capped at twenty percent of taxable income. Below the threshold that is the whole calculation. Above it, two things happen: the deduction becomes limited by W-2 wages the business pays, and a specified service trade or business, which covers most professional services, phases out entirely across the range above the threshold. That cliff makes taxable income management unusually valuable for professionals near the threshold.
twenty percent of business income, capped by twenty percent of taxable income and by wage limits above the thresholdEach of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.
QBI deduction$36,000.00
20% of 180,000, under the 39,000 income cap
Open this exampleQBI deduction$18,000.00
boundary: halfway through the phase-out
Open this exampleQBI deduction$0.00
degenerate case
Open this exampleFormula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator