Section 199A Deduction Ceiling Calculator
See how the Section 199A deduction is clipped by the 20% cap, the taxable income limitation, and the wage/property test. Enter your qualified business income and taxable income, then optionally add W-2 wages, qualified property, or capital gains to mirror real-world scenarios.
For planning only; confirm Section 199A eligibility and phase-outs with a tax professional.
Examples
- QBI $250,000, taxable income $310,000, W-2 wages $120,000 ⇒ Section 199A deduction $50,000 (20% of QBI binds).
- QBI $180,000, taxable income $170,000, W-2 wages blank, capital gains $10,000 ⇒ deduction $32,000 capped by taxable income limit.
FAQ
Does this calculator handle the phase-in thresholds for SSTBs?
It assumes you are above the threshold where the full wage/property limit applies or that your business is not an SSTB. Consult your tax advisor if you are within the phase-in range.
What if I leave W-2 wages blank?
The wage and qualified property limits are ignored when W-2 wages are blank, simulating taxpayers below the taxable income threshold where the limit does not apply.
How are net capital gains treated?
Any net capital gains reduce the taxable income cap, which can tighten the deduction even if 20% of QBI is higher.
Can this estimate replace professional advice?
No. Section 199A mechanics are complex. Use this as a directional estimate before confirming details with a CPA or tax professional.
Additional Information
- Calculations assume the business qualifies for the full 20% deduction without specified service trade or business phase-outs.
- The wage/property limit considers both the 50% wage cap and the 25% wages + 2.5% UBIA test, applying whichever is larger.
- Taxable income cap removes net capital gains before applying the 20% ceiling, mirroring the Internal Revenue Code formula.