Pro Tier Module
Qualified Business Income Deduction (IRC 199A)
Exact IRC 199A pass-through deduction math with the binding limitation shown - dated thresholds you confirm.
This tool runs inside GDBS Pro. What it computes and the authorities it applies are below.
The problem
The 199A pass-through deduction hinges on a taxable-income threshold that is inflation-indexed every year and on a wage-and-capital limitation that phases in differently for service businesses. A stale threshold or a mis-applied lesser/greater test silently produces a wrong deduction.
The local-first solution
This plugin computes the combined-QBI component with exact rational arithmetic, surfaces the year- and filing-status-indexed threshold you confirm, and reports which limitation actually set the number. It runs client-side and cites IRC 199A and the 1.199A regulations - no income data leaves your browser.
What it does
20% of QBI below the threshold, with no wage limit applied
W-2/UBIA limit: greater of 50% of wages or 25% of wages plus 2.5% of UBIA
SSTB exclusion and the applicable-percentage scale-down above the threshold
Pro-rata phase-in across the $50k single / $100k MFJ band
Overall 20%-of-(taxable income minus net capital gain) cap
Reports the binding limitation branch so the result is auditable
Honest scope
Not tax or legal advice; confirm against IRC 199A, the 1.199A regulations, and the IRS Rev. Proc. that sets your year's threshold. The percentages and proration are exact, but the taxable-income threshold is a dated, user-confirmable input that is always displayed. Aggregation of multiple businesses, the REIT/PTP component, ag-cooperative patron reduction, negative-QBI carryforward, and trust/estate threshold sharing are not modeled.
Authorities cited
- IRC 199A(a) - Allowance of the deduction: the lesser of (1) the combined qualified business income amount, or (2) 20% of the excess of taxable income over net capital gain.
- IRC 199A(b)(2) - For each qualified trade or business, the component is the LESSER of (A) 20% of QBI, or (B) the GREATER of (i) 50% of W-2 wages, or (ii) 25% of W-2 wages plus 2.5% of the unadjusted basis immediately after acquisition (UBIA) of all qualified property.
- IRC 199A(b)(6) - Definition of UBIA of qualified property (unadjusted basis immediately after acquisition).
- IRC 199A(d)(3) - Specified service trade or business (SSTB): treatment of QBI, W-2 wages, and UBIA phasing out across the threshold band; fully excluded above the band.
- IRC 199A(e)(2) - Threshold amount ($315,000 MFJ / $157,500 other for 2018) and the phase-in range of $100,000 (joint) / $50,000 (other); the threshold is inflation-adjusted annually.
- IRS Rev. Proc. (annual inflation adjustments) - 199A(e)(2) threshold by year: 2022 $340,100/$170,050; 2023 $364,200/$182,100 (Rev. Proc. 2022-38); 2024 $383,900/$191,950 (Rev. Proc. 2023-34); 2025 $394,600/$197,300 (Rev. Proc. 2024-40). Confirm the Rev. Proc. for your tax year.
- 26 CFR 1.199A-1(d)(2) - Computation when taxable income is within the phase-in range: the reduction of the 20%-QBI amount toward the wage-limited amount, and the SSTB applicable percentage.
- 26 CFR 1.199A-1(c) - Computation at or below the threshold (no wage limit, no SSTB exclusion).
- 26 CFR 1.199A-2 - Determination of W-2 wages and UBIA of qualified property.
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Compute your 199A deduction
Run the deduction in your browser and send the audit-ready result to a Sandbox workspace or a Worklog case. Nothing is uploaded to anyone's cloud.