For Specified Service Trades or Businesses (SSTBs): If your business is an SSTB (such as those in fields like health, law, accounting, consulting, and more), the QBI deduction begins to phase out when your taxable income exceeds the applicable threshold. The deduction is fully eliminated when your income reaches the upper threshold of the phase-out range. For 2025, the full phase-out occurs at $247,300 for single filers and $494,600 for married couples filing jointly.
For Non-SSTBs: If your business is not an SSTB and your income exceeds the threshold, the QBI deduction is limited to the lesser of: 20% of your QBI； OR The greater of 50% of the W-2 wages paid by the business, or 25% of W-2 wages plus 2.5% of the unadjusted basis immediately after acquisition (UBIA) of qualified property.
