QBI Deduction Calculator

2026 rules

Estimate the 20% qualified business income deduction for 2026.

Your numbers

Qualified business income

Taxable income before the QBI deduction

Net capital gains and qualified dividends in that income

Filing status

Specified service business (health, law, consulting, finance…)

W-2 wages the business paid

Original cost of business property (UBIA)

Result

QBI deduction$24,000

20% of QBI$24,000
Threshold for your status$201,750
Phase-in used0%
Limit: 20% of taxable income less gains$28,000
Deduction$24,000
Federal tax saved at 22%$5,280

How it works

Owners of sole proprietorships, partnerships and S corps can deduct up to 20% of qualified business income, limited to 20% of taxable income minus net capital gains.

Above $201,750 of taxable income ($403,500 joint), a limit based on W-2 wages and property phases in over the next $75,000 ($150,000 joint). Specified service businesses lose the deduction across the same range.

From 2026, anyone with at least $1,000 of QBI from a business they actively run gets at least $400.

2026 figures: IRS Rev. Proc. 2025-32 (2026 inflation adjustments); IRS Notice 2025-67 (2026 retirement plan limits); SSA 2026 COLA fact sheet; IRS Notice 2026-10 and Announcement 2026-11 (mileage).

Questions

Is the QBI deduction permanent?

Yes. The 2025 tax law made it permanent at 20% and widened the phase-in range.

Does it reduce self-employment tax?

No. It reduces taxable income for income tax only.