QBI Deduction Calculator 2026

2026 law and published parameters. Pub. L. 119-21 §70105 makes §199A permanent, expands the phase-in windows to $75,000 ($150,000 for joint returns), and adds the active-business minimum; §70111(b) supplies the §68 disregard. Rev. Proc. 2025-32 §4.26 publishes the 2026 thresholds and phase-in ends: Single and Head of household $201,750 / $276,750; Married filing separately $201,775 / $276,775; Married filing jointly $403,500 / $553,500. These are taxable-income thresholds, not MAGI thresholds. The $400 minimum and $1,000 active-QBI test are the 2026 statutory amounts; indexing starts after 2026. No unpublished future-year figures are used.

Starting component and overall limit. IRC §199A(a), (b)(1)–(2), (e)(1) supplies the deduction and taxable-income rules. The starting component is 20% × (QBI + qualified REIT dividends + already-adjusted qualified PTP income). The regular overall limit is 20% × max(0, taxable income − net capital gain), with qualified dividends included in net capital gain for this purpose. Section 199A(e)(1) says: “Except as otherwise provided in subsection (g)(2)(B), taxable income shall be computed without regard to section 68 and without regard to any deduction allowable under this section.” Enter that pre-§199A, pre-§68 taxable-income figure. The tool does not calculate §68, business eligibility or prior-year loss offsets.

Wage/property limit and SSTB phase-in. Under §199A(b)(2)–(3), the business component is subject to max(50% × W-2 wages, 25% × W-2 wages + 2.5% × UBIA), phased in only above the threshold. Phase = clamp((taxable income − threshold) ÷ window, 0, 1). For an SSTB, the applicable percentage is 1 − phase. Section 199A(d)(3)(A)(ii) requires that “only the applicable percentage of qualified items of income, gain, deduction, or loss, and the W–2 wages and the unadjusted basis immediately after acquisition of qualified property” be taken into account. Thus QBI, W-2 and UBIA all scale together. Full counted component = 20% × counted QBI; limited component = min(full counted component, wage/property limit); business component = full counted component − phase × (full counted component − limited component). At or below the threshold the full component applies; at or above the range end a non-SSTB uses the full wage/property limit, while an SSTB has zero counted QBI. SSTBs include health, law, accounting, actuarial science, performing arts, consulting, athletics, financial/brokerage services and specified investment/trading businesses; engineering and architecture are excluded under §199A(d)(2).

REIT dividends and adjusted PTP income. The separate 20% × (qualified REIT dividends + qualified PTP income) component is added after the business wage/property limit, before the overall limit. It is wage/UBIA-exempt. PTP income is not automatically SSTB-exempt: Treas. Reg. §1.199A-3(c)(3) states, “The specified service trade or business limitations described in §§ 1.199A-1(d)(3) and 1.199A-5 also apply to income earned from a PTP.” The PTP input must therefore already reflect those adjustments; this tool does not compute them.

Active-business minimum after the regular limits. Section 199A(a) begins “except as provided in subsection (i)”. Section 199A(i)(1) makes the deduction the greater of “the amount of such deduction determined without regard to this subsection” or “$400.” There is no requirement that the regular deduction first be positive. Section 199A(i)(2) requires at least $1,000 of QBI from active trades or businesses; an active trade or business is a qualified trade or business in which the taxpayer materially participates under §469(h). In this one-business model the test uses counted QBI after SSTB scaling. Final deduction = max(regular deduction, $400) if counted active QBI ≥ $1,000 and participation is affirmed; otherwise use the regular deduction. An above-range-only SSTB fails this test because no QBI counts. A qualifying non-SSTB with no wages or property can still receive the minimum. REIT/PTP amounts are not used to establish active-QBI eligibility in this tool.

Tax-saving illustration and rounding. Federal tax saved = the unrounded final deduction × the ordinary marginal rate at entered taxable income. The shared Rev. Proc. 2025-32 §4.01 Tables 1–4 bracket engine supplies that rate, including the Head-of-household 24% bracket top of $201,750. This is not a bracket-by-bracket tax recomputation, does not stack capital gains, and can overstate savings if the deduction crosses brackets. Input amounts round half-up to cents; internal deduction calculations retain full precision; displayed money and percentages round to two decimals. The final amount and tax-saving illustration are each rounded independently.

Input contract and scope. Money fields accept complete plain numbers or properly grouped commas (1,234,567.89). Malformed groups such as 1,23, empty or invalid text remain visible with an error and retain the last committed full value. Changes apply on blur or Enter. Negative amounts clamp to $0; amounts cap at $10,000,000 and round half-up to cents ($0.005 rounds up). This is a positive-QBI illustration for one business, not a loss engine. Out of scope: multi-business loss netting/carryforward, PTP aggregation, PTP SSTB adjustments, trusts/estates, Rev. Proc. 2019-38 rental safe harbor qualification, cooperative patron rules, §68 calculations and state tax. Confirm qualified wages, property, REIT/PTP amounts and material participation before using the results. IRS Form 8995-A instructions explain the return workflow; the 2026 parameters here come from the cited statute and revenue procedure. Illustrative only. ESTIMATED · NOT ADVICE / ILLUSTRATION · NOT OFFICIAL.