Qualified Business Income Deduction Guide for Pass-Through Entities (2026)
Calculate QBI deduction for pass-through businesses: eligibility criteria, income limits, SSTB restrictions, and deduction optimization for self-employed.
Summary
QBI deduction allows 20% pass-through income deduction with limits. This guide explains eligibility, SSTB restrictions, and optimization strategies.
Key Steps
- 1Check eligibility: sole proprietor, partnership, S corporation income qualifies.
- 2Calculate deduction base: 20% of qualified business income (QBI) from pass-through entities.
- 3Apply income limits: deduction phases out above $191K single, $383K joint SSTB threshold.
- 4Identify SSTB restrictions: specified service trades limited at high income levels.
- 5Optimize entity structure: S corporation may increase QBI deduction through reasonable salary.