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Estimate Your 20% Qualified Business Income Deduction

With $80,000 of QBI and $90,000 taxable income in a regular business, the Section 199A deduction is $16,000 (20% of QBI). Because taxable income is below the 2025 phase-in threshold (~$197,300 single / $394,600 MFJ), there is no phase-out. A specified service business above the top threshold gets $0.

Results

Visualization

Cashbizly provides illustrative business estimates only. Results depend on your inputs and assumptions and are not accounting, tax, or legal advice. Consult a CPA or financial advisor before major decisions. Tax-year figures (mileage, QBI, SEP, etc.) are labelled by year and should be verified at IRS.gov.

How It Works

QBI Deduction = 20% of Qualified Business Income, capped at 20% of taxable income, with a phase-out for high earners and a full cutoff for Specified Service Trades/Businesses (SSTBs — law, health, consulting, etc.) above the top threshold. 2025 thresholds are inflation-adjusted from 2024's $191,950 / $383,900. This is the pass-through deduction created by the 2017 tax law.

What Should You Do?

Scenario 1: an SSTB earning $400k taxable gets no QBI deduction. Scenario 2: a regular business at $300k taxable sees the deduction phase down between the thresholds. Scenario 3: a married couple at $150k taxable with $80k QBI gets the full $16k.

Frequently Asked Questions

What is a Specified Service Trade?

SSTBs include health, law, accounting, consulting, financial, and similar services; above the top threshold they lose the deduction.

Are the thresholds exact for 2025?

They are inflation-adjusted annually; the figures here are 2025 estimates — verify at IRS.gov before relying on them.

Does W-2 income count as QBI?

No — QBI is from a qualified trade or business; wages are separate. The 20% of W-2 wages/property limit also applies above thresholds.

Authoritative References

IRS — Qualified Business Income Deduction — Section 199A overview and thresholds.
IRS — Publication 535 — Business expenses and QBI context.