QBI Deduction (§199A)
The Qualified Business Income deduction, created by Section 199A of the tax code, lets owners of pass-through businesses (sole proprietorships, single-member LLCs, partnerships, S-corps) deduct up to 20% of their net qualified business income from taxable income. Below an annual income threshold (directionally around $200,000 single / $400,000 married-filing-jointly at 2026 levels) almost everyone gets the full 20%; above it the deduction phases out or is limited, with tighter rules for certain service businesses. It reduces income tax only, not self-employment tax.
Lessons that use this term
Related terms
Adjusted Cost Basis · Annuity · Capital Gains Distribution · Capitalized Interest · Cost Basis · Dividend Discount Model (DDM)
Open this term in the app → — no account needed; browse the full glossary while you research.