Glossary
QBI deduction
A deduction of up to 20% of qualified business income for many self-employed people.
Section 199A allows a deduction of up to 20% of qualified business income from a sole proprietorship, partnership, or S corporation. Below an annual taxable-income threshold the calculation is straightforward; above it, limits based on W-2 wages paid, property held, and the type of business apply, and certain service businesses phase out entirely. Because those limits turn on facts a calculator cannot see, estimates on this site apply the simplified version below the threshold and compute without the deduction above it, saying so plainly.