199A SSTB 2027 Phaseout Calculator
Estimate the Specified Service Trade or Business (SSTB) phaseout of your Section 199A deduction for 2027.
What Counts as a Specified Service Trade or Business
SSTBs include: health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, investment management, and any trade where the principal asset is the reputation or skill of one or more employees. Engineering and architecture are explicitly EXCLUDED from SSTB status. Source: IRC §199A(d)(2). Last updated: May 2026.
2027 SSTB Phaseout Mechanics
For 2027, SSTB owners get the FULL 20% deduction below taxable income of $241,950 single / $483,900 MFJ. The deduction phases out completely over the next $75,000 (single) / $50,000 (MFJ) — meaning total elimination at approximately $316,950 single / $533,900 MFJ. Above the upper threshold, SSTB owners get ZERO Section 199A deduction.
Why the Phaseout Exists
Congress designed Section 199A to favor businesses that create jobs and invest in property — not high-income professionals who primarily monetize their personal skill. The SSTB phaseout is the mechanism to exclude these professions at high income levels. Engineers and architects were carved out due to lobbying.
SSTB Mitigation Strategies
(1) Maximize pre-tax retirement contributions (Solo 401(k), Cash Balance Plan) to drop taxable income below the threshold. (2) Defined Benefit plans can shelter $200K+/year for 50+ professionals. (3) Charitable bunching via Donor-Advised Funds in high-income years. (4) Spouse income shifting where legitimate. (5) Cost segregation on owned real estate to generate paper losses.
Frequently Asked Questions
What is an SSTB for QBI purposes?
A Specified Service Trade or Business includes health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, investment management, or any business where the principal asset is the reputation/skill of employees. Engineering and architecture are excluded.
What's the 2027 SSTB phaseout range?
For 2027, the full QBI deduction applies below $241,950 single / $483,900 MFJ taxable income. It phases out completely over the next $75,000 (single) / $50,000 (MFJ). Above $316,950 single / $533,900 MFJ, SSTB owners get zero \u00a7199A deduction.
Am I an SSTB if I'm a financial advisor?
Yes. Financial services, investment management, dealing in securities/partnership interests/commodities, and brokerage services are all SSTBs. Insurance brokers were initially included but later excluded in proposed regs \u2014 check current Treasury guidance for your specific role.
Are doctors and dentists SSTBs?
Yes. Health is explicitly listed in \u00a7199A. This includes physicians, dentists, veterinarians, chiropractors, physical therapists, and pharmacists. Even ancillary medical staff in solo practices are SSTB if income exceeds thresholds.
How can high-earning SSTBs preserve the deduction?
The main strategy is dropping taxable income below the threshold via retirement plan contributions. A Defined Benefit Plan or Cash Balance Plan can shelter $200K+ for late-career professionals \u2014 that alone can keep QBI alive. Charitable bunching helps too.
Does the OBBB law change SSTB rules in 2027?
OBBB made \u00a7199A permanent but did NOT change the SSTB phaseout mechanics. The same income thresholds apply (indexed for inflation each year). The SSTB rules remain identical to original TCJA \u2014 just extended past the 2025 sunset.