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Tax simulator
QBI deduction estimator
The Section 199A deduction for pass-through business income behaves in ways that surprise owners: the same business can get a clean 20% at one income level and nothing at a higher one, and service businesses are treated differently above the income thresholds. This estimates your deduction on your own numbers, shows what it saves at your tax rate, and explains why the thresholds and wage limit landed where they did.
Background reading: Business & side income
Estimated QBI (Section 199A) deduction
$60,000
Above threshold (SSTB or wage-limited)
How the deduction was figured
RegimeAbove threshold (SSTB or wage-limited)
Taxable income before QBI$567,800
Tentative deduction (20% of QBI)$80,000
W-2 wage limit (50% of wages)$60,000
Final deduction$60,000
Value at your marginal rate (federal only)$21,000
Where this goes next
This estimates your deduction; it does not tell you how to restructure your business to capture it. That is a conversation with a CFP.
Assumptions and simplifications
- Taxable income before the QBI deduction is approximated as your income minus the standard deduction; other deductions are not modeled.
- The deduction is capped at 20% of taxable income; the reduction for net capital gains in that cap is not modeled.
- The W-2 wage limit uses 50% of W-2 wages; the alternative 25%-of-wages-plus-2.5%-of-property (UBIA) test is not modeled.
- In-phaseout treatment is a standard simplification of the Section 199A range math; verify with a CFP for an exact figure.