The Qualified Business Income (QBI) Deduction allows pass-through business owners (sole proprietors, partnerships, S-corps, certain LLCs) to deduct up to 20% of qualified business income from their taxable income — a major benefit created by the 2017 tax reform. Income limits apply: above $241,950 single / $483,900 joint (2026), the deduction phases out for 'specified service trades' (consulting, law, finance, health). Other businesses face W-2 wage and property-based limitations at higher incomes. QBI deduction is below-the-line — it doesn't reduce AGI or SE tax. The deduction is scheduled to expire after 2025 unless extended.
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August 22, 2026 · Aditya Gupta
Tax
Related terms
Alternative Minimum Tax
Alternative Minimum Tax (AMT) is a parallel tax system designed to ensure high-income taxpayers pay a minimum. Calculate…
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