United States · Self-employed · Section 199A
QBI deduction calculator for sole proprietors.
The simplified Form 8995 path for taxable income at or below the 2026 threshold. Enter your profit and deductions to see the deduction and where the cap bites. Nothing you enter leaves your browser.
A single filer with $80,000 of profit and no other income has taxable income of $58,248.18 before the deduction, well below the $201,750 threshold, so the QBI deduction is $11,649.64. The cap, 20% of taxable income, is lower than 20% of QBI ($14,869.64).
How this is calculated
- QBI is net profit minus the deductible half of self-employment tax, the self-employed health insurance deduction and retirement contributions made for yourself.
- Taxable income before the deduction is AGI (profit plus other income less those adjustments) minus the 2026 standard deduction.
- Threshold check. At or below $201,750 (single and head of household), $403,500 (joint) or $201,775 (separate), the simplified Form 8995 path applies. Above it, wage and property limits and a phase-out can apply, and this tool stops.
- Deduction is the smaller of 20% of QBI and 20% of (taxable income before the deduction minus net capital gain and qualified dividends).
- Minimum. Starting in 2026 section 199A(i) sets a $400 minimum deduction when you have at least $1,000 of QBI. The tool applies it, capped at taxable income, as an assumption you should confirm in the Form 8995 instructions.
Worked examples (single)
| Scenario | Result |
|---|---|
| $80,000 profit, no other income | QBI $74,348.18; taxable income $58,248.18; 20% of QBI $14,869.64; income cap $11,649.64; deduction $11,649.64 |
| $2,000 profit, no other income | QBI $1,858.71; taxable income $0.00; deduction $0.00 |
| $80,000 profit plus $150,000 other income | Taxable income $208,248.18 is above $201,750; no figure given |
The second case is deliberately small: with so little taxable income left after the standard deduction, the deduction is limited by taxable income rather than by the $400 minimum.
What this does not cover
- Taxable income above the threshold: the W-2 wage and property limits, the phase-in range up to $276,750 (single) or $553,500 (joint), and Form 8995-A.
- Specified service trades or businesses such as consulting, health or financial services, which lose the deduction in the phase-out range.
- Multiple businesses, negative QBI carryforwards, REIT dividends, publicly traded partnership income and cooperative payments.
- Itemized deductions, Schedule 1-A deductions (tips, overtime and others), credits and state tax. Entering itemized deductions in place of the standard deduction is not supported.
- Whether your activity is a trade or business for section 199A.
Method and assumptions
The simplified calculation follows Form 8995 (retrieved instructions are the 2025 edition; the 2026 figures come from the Revenue Procedure). The income cap subtracts net capital gain increased by qualified dividends. The 2026 thresholds and the $400 minimum come from IRS Rev. Proc. 2025-32 (its qualified business income threshold table and the OBBBA minimum-deduction note). The treatment of the minimum deduction against the taxable-income cap is an assumption and is labelled as such. The tool never produces a figure above the threshold because the correct figure then depends on W-2 wages and property that it does not collect.
Results vary with your actual income, deductions, credits and filing situation. This page uses the figures you enter and published IRS rules; it does not predict what you will earn or owe. This is general information, not tax, legal or accounting advice; confirm your own situation against the linked IRS instructions or with a qualified preparer. Nothing here collects or stores personal data.
Sources
- IRS Instructions for Form 8995 (Qualified Business Income Deduction, simplified), retrieved October 2026
- IRS: Qualified business income deduction, retrieved October 2026
- IRS Rev. Proc. 2025-32 (2026 brackets, standard deduction, section 199A thresholds, $400 minimum QBI deduction), retrieved October 2026
- IRS: Self-employment tax (Social Security and Medicare taxes), retrieved October 2026
Cite this page: TNAADO Tools, "QBI deduction calculator for sole proprietors," tools.tnaado.ca/us/qbi-deduction-calculator-sole-proprietors/, figures retrieved October 2026.
Frequently asked questions
What is the QBI deduction for the self-employed?
It lets eligible owners of sole proprietorships, partnerships and S corporations deduct up to 20% of qualified business income from taxable income, subject to a taxable-income cap. It is claimed on Form 1040 using Form 8995 or 8995-A.
What are the 2026 income thresholds?
For 2026 the threshold amounts are $201,750 for single and head of household, $403,500 for married filing jointly and $201,775 for married filing separately (Rev. Proc. 2025-32). Above them, W-2 wage and property limits and, for service businesses, a phase-out apply.
Is there a minimum QBI deduction?
For taxable years beginning after December 31, 2025, section 199A(i) sets a $400 minimum deduction and requires at least $1,000 of qualified business income to be eligible. Confirm the exact conditions in the Form 8995 instructions for 2026.
Does QBI reduce self-employment tax?
No. It is a deduction from taxable income, so it lowers income tax only. Self-employment tax is figured separately.
Can I rely on this number?
Treat it as an estimate built from your own inputs for the simple case. Results vary, and a tax professional or the IRS instructions should settle your actual return.
Not tax advice
This is an educational estimate built from the numbers you enter and published IRS rules. It is not tax advice and does not predict what you will earn or owe. Self-employed in Canada instead? Use the Canadian self-employment tax calculator.