QBI deduction for sole proprietors (Section 199A)

Section 199A lets many self-employed taxpayers deduct up to 20% of qualified business income (QBI) from taxable income. For a sole proprietor filing Schedule C, QBI is generally your net profit after the SE tax deduction — not gross receipts.

Phase-out for high incomes

Above a taxable-income threshold (adjusted annually), the deduction phases out over a fixed dollar range. Our calculator applies the single-filer threshold and linear phase-out. It does not model specified service trades (law, medicine, consulting, etc.) separately from other businesses — for most solo freelancers without W-2 wages, the simplified result matches the full deduction or zero at the top of the range.

2026 minimum deduction

Under current law, if QBI is at least $1,000, the deduction is at least $400 for tax years beginning after 2025. We apply that floor in our 2026 engine.

Not a substitute for filing

QBI interacts with total taxable income, capital gains, and other income on Form 1040. Use the QBI calculator for planning; confirm on your return or with a CPA if you are near the phase-out range.