QBI Deduction Estimator for Freelancers (2026)
Short answer: most US freelancers can deduct up to 20% of qualified business income. The deduction is now permanent (since July 2025), with a new $400 minimum for 2026.
2026 full-deduction threshold: $201,750
Roughly: profit − half of SE tax − standard/itemized deductions. (Form 1040, Line 15.)
Your net Schedule C profit, generally. Excludes W-2 wages and investment income.
Solo freelancers: usually $0. Only matters above the income threshold.
Health, law, accounting, consulting, performing arts, athletics, financial/brokerage services. Engineering and architecture are not SSTBs.
Auto-set from your taxable income; override if you know better.
Below the threshold: full 20% applies (Form 8995).
- 20% of QBI (tentative)
- $15,000
- W-2 / property limit
- $0
- Taxable-income ceiling
- $16,000
- Which limit bound?
- None — full 20%
- File with
- Form 8995 (simple)
- 1040 line
- Line 13
Simplifications: single-business estimate; the $400 floor is applied as documented; REIT/PTP income, aggregation and loss netting are out of scope.
How the 2026 rules work- Below the threshold ($201,750 single / $403,500 joint): full 20% of QBI. No wage limits, no SSTB penalty. File the simple Form 8995.
- Inside the phase-in range ($75k wide single / $150k joint): wage/property limits and the SSTB haircut phase in gradually. File Form 8995-A.
- Above the range: non-SSTBs are capped by the wage/property limit; SSTBs get $0.
- New for 2026: a $400 minimum deduction if you have at least $1,000 of QBI from a business you materially participate in — even if the normal math would give you less.
The deduction lowers your taxable income (Form 1040, Line 13). It does not lower AGI and does not reduce self-employment tax.
Frequently asked questionsWhat is the QBI deduction for 2026?
Section 199A lets eligible US business owners — including freelancers — deduct up to 20% of qualified business income from taxable income. For 2026 the deduction is permanent, with wider phase-in ranges and a new $400 minimum.Is the 20% QBI deduction permanent now, or does it still expire?
Permanent. The One Big Beautiful Bill Act (signed July 4, 2025) removed the end-of-2025 sunset. The old “it expires after 2025” warnings on many sites are outdated.Do freelancers and sole proprietors qualify?
Yes — sole proprietors, single-member LLCs, partnerships and S-corps can all qualify. W-2 employees do not. Most freelancers under the income threshold get the full 20% with no complications.What is the new $400 minimum QBI deduction?
New for 2026: if you have at least $1,000 of QBI from a business you materially participate in, your deduction is at least $400 — even if wage limits would otherwise shrink it to zero.Does the QBI deduction reduce my self-employment tax?
No. It reduces taxable income for income-tax purposes only (Form 1040, Line 13). It does not reduce AGI and does not reduce the 15.3% self-employment tax.
What is the QBI deduction for 2026?
Is the 20% QBI deduction permanent now, or does it still expire?
Do freelancers and sole proprietors qualify?
What is the new $400 minimum QBI deduction?
Does the QBI deduction reduce my self-employment tax?
Please note: Estimate only — not tax advice. Section 199A is complex and individual circumstances vary; consult a qualified tax professional (CPA or Enrolled Agent) before filing. US federal rules only; state conformity varies.