QBI Deduction

Section 199A — 20% pass-through deduction with W-2 / UBIA limits

Your Business

Income
Net business income from your pass-through entity
Total taxable income on your return BEFORE applying QBI
Reduces the overall taxable-income cap on the deduction
Business Profile
SSTBs lose the deduction above the phase-in range
Wages paid TO employees of the business — includes owner's W-2 if S-corp
Unadjusted basis of depreciable business property (rental real estate, equipment)

QBI Deduction

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Regime

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Simple 20% Limit

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20% of QBI before any limits

W-2 / UBIA Limit

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Greater of 50% W-2 or 25% W-2 + 2.5% UBIA

Taxable-Income Cap

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20% × (taxable income − net cap gains)

Federal Tax Saved (est.)

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Deduction × your marginal bracket

Limit Comparison

How the Math Worked

Step-by-step breakdown of the QBI deduction calculation
Step Value Notes

Note: The QBI deduction reduces federal income tax but NOT self-employment tax. It is scheduled to expire at the end of 2025 absent congressional action. Real estate rentals must satisfy the IRS safe harbor or otherwise rise to the level of a trade or business to qualify.