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Section 199A 20% deduction for self-employed and pass-through entity owners. Includes SSTB phase-outs.

Section 199A · 2026

Calculate your QBI deduction

Qualified Business Income ($) Net SE income from Schedule C, after expenses but before QBI deduction.

Taxable income (before QBI) ($) From Form 1040 Line 15 minus QBI deduction. Default sample is mid-phase-out so the SSTB toggle has visible effect.

Filing status

My business is a "Specified Service Trade or Business" (SSTB) — health, law, accounting, consulting, financial services, athletics, performing arts My business pays W-2 wages to employees (most freelancers / sole props do not)

Estimated QBI deduction

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20% of qualified business income, subject to limits

Breakdown

Tentative QBI deduction (20% of QBI)—

Income-based limit (20% of taxable income)—

Phase-out applied—

Final QBI deduction—

How QBI works

The 20% deduction explained.

The QBI deduction (Section 199A, created by the 2017 TCJA and extended by OBBBA) lets owners of pass-through businesses deduct up to 20% of their qualified business income from federal taxable income. For most freelancers in moderate income brackets, this is a 4-7% effective tax rate reduction.

2026 phase-out thresholds:

Single: phase-out begins at $201,775 taxable income, fully phased out at $276,775.
MFJ: phase-out begins at $403,550 taxable income, fully phased out at $553,550.
Head of household: same as single.

SSTB (Specified Service Trade or Business) categories lose QBI above the phase-out range entirely. Examples: doctors, lawyers, CPAs, consultants, financial advisors. Architecture and engineering are NOT SSTBs.

Most freelancers (designers, developers, photographers, writers, contractors, real estate agents) are NOT SSTBs and keep QBI even at high incomes. Read our QBI guide for the full rules.

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