Qualified Business Income Deduction Calculator

QBI deduction allows up to 20% deduction on pass-through business income for many small business owners.

QBI income

Total taxable income

Income threshold (joint)

Specified service trade?

Marginal tax rate %

QBI deduction

$40,000

Tax savings

$12,800

Deduction %

0.2%

How the math works

QBI deduction = 20% of QBI, subject to phase-outs above income threshold for SSTBs.

$200k QBI × 20% = $40,000 deduction × 32% = $12,800 tax savings.

How to Use

Enter qbi income.
Enter total taxable income.
Enter income threshold (joint).
Enter specified service trade?.
Enter marginal tax rate %.
Read qbi deduction.

Frequently Asked Questions

QBI deduction rules?

Up to 20% of qualified business income (QBI) for sole prop, partnership, S-corp owners. Income limit: under $241,950 single / $483,900 joint (2024) = no restriction. Above: phase-out of SSTBs (specified service trades — health, law, consulting, accounting, etc.). W-2 wage and basis limits apply. Real estate rentals: rebuttable presumption of QBI if 250+ hr safe harbor met. Sunset: scheduled to expire after 2025 unless extended. Stack with depreciation, interest deductions for max effect.

How is this tax impact computed?

Tax outcomes depend on filing status, income bracket, depreciation schedule, basis adjustments, AMT exposure, and state conformity. Real estate tax planning typically involves cost segregation, 1031 exchanges, opportunity zone, depreciation recapture, passive activity rules, and entity structure (LLC vs partnership vs S-corp). This calculator provides directional analysis — final position requires CPA review.

State conformity?

States vary on conformity to federal tax code: California, NY, MA decouple selectively. Bonus depreciation: most states reduce or eliminate. QBI: most states don't conform. Section 1031: federal-only deferral, some states require state-level recapture. Property tax cap: state-specific (CA Prop 13, MI Headlee, FL SOH). Multi-state property requires apportionment analysis.

When to prioritize this strategy?

Tax strategies have setup cost, complexity, and audit risk. Cost segregation: $5–15k study, materially helps high-basis investors. 1031: 45/180 day deadlines, identification rules, qualified intermediary fees. Opportunity Zone: long hold required. Stack strategies: don't double-count benefits. CPA + tax attorney coordination essential for $1M+ strategies.