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QBI deduction estimate

What 20% qualified business income deduction survives a simple wage limitation?

Your numbers

Estimated QBI deduction

$28,000

20% of QBI$28,000
20% of taxable income$36,000
50% of W-2 wages$30,000

Tip. Educational estimate with the assumptions listed on this page. Not tax, legal, or investment advice.

Assumptions

  • Specified-service trade or business phaseouts are not modeled.
  • The UBIA 2.5% property test is not modeled.
  • Turn on the wage limit if you are over the taxable-income threshold.

Explore the numbers

Examples

Load a scenario, then change one input at a time.

Example 1

Under threshold

Wage limit off.

Estimated QBI deduction

$28,000

Example 2

Over threshold

Wage limit on with $60k payroll.

Estimated QBI deduction

$30,000

Example 3

Thin payroll

High QBI, little W-2.

Estimated QBI deduction

$10,000

What this calculates

Estimate Section 199A QBI as the lesser of 20% of QBI, 20% of taxable income, and optionally 50% of W-2 wages.

How to use it

  1. Use profit after ordinary business deductions, not gross receipts.
  2. If you are well under the threshold, leave the wage limit off.
  3. If you are over it, turn the limit on and see whether wages or QBI binds.

Common mistakes

  • Treating W-2 wages paid to yourself in an S corp as increasing QBI. They reduce QBI.
  • Ignoring SSTB phaseouts for consultants and similar fields.
  • Using AGI instead of taxable income.

Formula

QBI deduction ≈ min(20% × QBI, 20% × taxable income, and if toggled 50% × W-2 wages).

FAQ

Does an S corp help QBI?

Sometimes. Reasonable salary creates wages that can support the limitation, but salary itself is not QBI. Model both.

Are rental STRs QBI?

They can be if they rise to a trade or business. That is facts-and-circumstances. Do not assume it.

Is 20% automatic?

No. Taxable income and wage/property tests can cut it. This is the simple screen.

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