QBI Section 199A 2027 Permanent Deduction Calculator
Estimate your 20% Qualified Business Income deduction under the now-permanent OBBB Section 199A rules.
Why Section 199A Is Now Permanent
Under the One Big Beautiful Bill (OBBB), the 20% Qualified Business Income (QBI) deduction was made PERMANENT effective 2025 — eliminating the original TCJA sunset at end of 2025. For 2027, pass-through owners (sole props, S corps, partnerships, certain trusts) get the full 20% deduction on qualified business income. Source: IRC §199A as amended by OBBB. Last updated: May 2026.
2027 Income Thresholds and Phaseouts
For 2027, the lower threshold (below which the full 20% applies without W-2 or property limits) is approximately $241,950 single / $483,900 MFJ. Above that, Specified Service Trade or Business (SSTB) owners face a phaseout over $75,000 ($50K MFJ), while non-SSTB owners face W-2 wages and UBIA property limits.
What Counts as Qualified Business Income
QBI = net income from a U.S. trade or business, EXCLUDING: capital gains, dividends, interest, wages paid to yourself (S corp owner), reasonable compensation, and guaranteed payments. Rental real estate qualifies only if it meets the §199A safe harbor (250+ hours/year) or rises to a trade or business level.
20% Taxable Income Cap (Often Overlooked)
Your QBI deduction can never exceed 20% of (Taxable Income minus Net Capital Gains and Qualified Dividends). High earners with large investment income often get capped here before the W-2/property tests even apply. Run the math both ways.