The qualified business income (QBI) deduction can significantly reduce your tax burden if you're self-employed or own a pass-through entity. Use the calculator below to determine your eligible QBI deduction.
Looking to optimize your business tax strategy? Book a free intro call with the SLP Wealth team to learn more.
Tax filing status
Your total pretax business income after paying employees Include what you paid yourself in W2 wages, exclude what you paid employees in W2 wages. For example, pretend you earned $500,000 in gross revenue and paid $200,000 to employees and $100,000 to yourself in W2 wages. Your business income for this cell would be $300,000.
Taxable income from other sources List income earned outside of your business. If married, you'll list your spouse's income in a different cell.
W-2 wages you paid yourself from the business List $0 if you're a sole proprietor and not taxed as a S corp
W-2 wages you paid employees
Does your business primarily provide professional services? Specifically, is your business a SSTB (Specified Service or Trade Business). Any business such as a dental practice, medical practice, vet med practice, law practice, or any other business where the earnings are derived primarily based on the professional skill of the owner would be labeled a Specified Service Business for the purposes of the QBI Deduction.
List itemized deduction (in $) Enter the estimated amount you would pay per month to rent a house or apartment if you decided to do so instead of purchasing
| Qualified Business Income (QBI) | |
| QBI Deduction / 199A Deduction | |
| Taxable Income After Standard Deduction | |
| Phaseout status | |
| Total federal tax savings |
Detailed QBI Calculations (Show)
| Below Phaseout Calculations | |
| 20% QBI | |
| 20% Taxable income | |
| Deduction Allowed (lessor of these 2 numbers) |
| In Phaseout Range Calculations | |
| 20% QBI | |
| 50% of wages paid | |
| Reduction of QBI | |
| Deduction Allowed |
| Above Phaseout Range Calculations | |
| 20% QBI | |
| 50% of wages paid | |
| Deduction Allowed (lessor of these 2 numbers, or 0 if you're a professional service business) |
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If you’re self-employed or own a small business that is considered a “pass-through entity,” you might be eligible for the qualified business income (QBI) deduction. This deduction is sometimes referred to as the Section 199A deduction, and it’s one of the many tax write-offs designed to save business owners money.
How does the QBI deduction work?
The QBI deduction allows eligible self-employed and small business owners with “pass-through entities” to deduct up to 20% of their qualified business income on federal taxes.
Pass-through entities are businesses where the income ‘passes through' to the owners' personal tax returns rather than being taxed at the corporate level. This includes:
- Sole proprietorships
- Partnerships
- S corporations
- Trusts and estates
However, understanding the income thresholds is essential, as they can significantly affect your eligibility for the QBI deduction.
Do physicians qualify for the QBI deduction?
Specified service trades or businesses (SSTBs), such as those who provide health services, are only eligible for the QBI deduction if their income doesn’t exceed certain thresholds.
For the 2024 tax year (taxes to be filed in 2025), you can receive the full QBI deduction if your total taxable income is less than:
- $383,900 for married filing jointly
- $191,950 for single or married filing separately
If your income exceeds these limits for 2024, you might still be eligible for a partial deduction as the QBI deduction phases out from $383,901 to $483,900 for joint filers and $191,951 to $241,950 for other types of filers.
Many dental and medical practice owners assume the QBI deduction is off-limits due to being a specialized service trade or business. But as long as you’re below the income threshold, your profession won’t come into play when determining eligibility.
Can I claim the QBI deduction?
The QBI deduction is available to qualifying individuals who earn income via pass-through entities regardless of whether you itemize or take the standard deduction. But it's important to note that this deduction is only available to claim through December 31, 2025.
Use our calculator above to estimate your qualified business income and potential QBI deduction.
Keep in mind the QBI deduction can be a complex tax write-off depending on your income and profession — especially if you file as an S-corporation since anything you pay yourself in wages won’t count toward QBI. Our team at SLP Wealth can help explain the nuances of this tax deduction while maximizing your overall tax strategy.