QBI Deduction Calculator
Enter your net profit, filing status, and any other income to see your actual 2026 Qualified Business Income deduction — not a hypothetical example.
Your QBI deduction
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20% of QBI
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Taxable-income cap
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Which one binds
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Federal tax after the deduction
- Taxable income before QBI
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- QBI deduction
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- Taxable income after QBI
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Estimates for tax year 2026, for informational purposes only — not tax advice. Does not model the SSTB phase-out or the wage/property limitation for higher incomes; see the QBI guide for details on what that means for you.
How is the QBI deduction calculated?
The QBI deduction is the lesser of two figures: 20% of your qualified business income (your net self-employment profit), or 20% of your taxable income calculated before the QBI deduction itself. For most freelancers with no other income, the second figure — the taxable-income cap — ends up smaller, because the standard deduction and the deduction for half your SE tax already shrink your taxable income below your net profit.
Worked example: pure freelance income
A single freelancer with $80,000 in net profit and no other income:
- 20% of net profit would be: $16,000
- Actual QBI deduction (capped by taxable income): $11,650
- Taxable income after the QBI deduction: $46,599
Worked example: freelance income plus W-2 wages
A single filer with $100,000 in W-2 wages plus a $20,000 net-profit side business:
- Here the wages already push taxable income above net profit, so the full 20%-of-profit figure applies:
- QBI deduction: $4,000 (exactly 20% of the $20,000 profit)
- Taxable income after the QBI deduction: $98,487
Frequently asked questions
Do 1099 freelancers qualify for the QBI deduction?
Yes — sole proprietors and single-member LLCs reporting income on Schedule C generally qualify, since QBI covers income from a qualified pass-through trade or business, which includes most freelance and independent contractor work.
Why is my QBI deduction less than 20% of my profit?
For a freelancer with no other income, the deduction is capped at 20% of your taxable income (after the standard deduction and half-SE-tax deduction), which is usually lower than 20% of your raw net profit. The full 20%-of-profit figure only applies once other income — like W-2 wages — pushes your taxable income back above your net profit.
What is the new 2026 QBI minimum deduction?
Starting with tax year 2026, a provision from the One Big Beautiful Bill Act (OBBBA) guarantees a minimum QBI deduction of $400 for taxpayers with at least $1,000 of qualified business income from an active trade or business — even in cases where the standard formula would otherwise produce less.
Does this calculator account for the SSTB phase-out?
No — specified service trades or businesses (SSTBs) and, above a higher threshold, all business types can face additional phase-out and wage/property limitation rules that this simplified calculator doesn't model. If your taxable income is near or above the phase-out threshold, a tax professional can calculate your actual deduction.