QBI Deduction: QBI Deduction (Section 199A)
Quick answer
Section 199A lets eligible owners of sole proprietorships, partnerships and S corporations deduct up to 20% of qualified business income. Below annually indexed taxable income thresholds, the full deduction is generally allowed. Above them, W-2 wages and the unadjusted basis of qualified property (UBIA) limit the deduction, and specified service businesses phase out.
QBI Deduction (Section 199A) is tested on EA Exam Part 2 (Individual Taxpayer Issues). Primary IRS reference: IRC §199A.
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About this EA exam topic
The qualified business income (QBI) deduction under Section 199A lets eligible owners of pass-through businesses deduct up to 20% of qualified business income, subject to wage/property limits and a phase-out for specified service businesses.
The EA exam tests the taxable-income thresholds, the W-2-wage and UBIA limits above the threshold, and the SSTB limitation.
What you'll be tested on
- The 20% QBI deduction and qualifying income
- Taxable-income thresholds and phase-in of limits
- W-2 wage and UBIA limitations above the threshold
- Specified service trade or business (SSTB) limits
How to prepare
- Anchor on the taxable-income thresholds. Below them the limits do not apply.
- Above the threshold, apply the wage/property limit.
- Know which businesses are SSTBs.
Practice questions for QBI Deduction (Section 199A)
What this topic covers
QBI Deduction (Section 199A) appears in Part 2: Business Taxation within the Individual Taxpayer Issues domain. VantageEA practice questions focus on how qbi deduction rules are applied in realistic EA exam fact patterns.
What candidates practice
Candidates practice identifying tested facts, choosing the best multiple-choice answer, and reviewing explanations tied to IRC §199A, IRS Publication 535. This topic supports timed 100-question PSI-style mock tests and shorter topic review sessions.
Related practice-question themes include qbi, section-199a, qualified-business-income, pass-through.
Topic overview
Official IRS sources
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Frequently asked questions
What is the QBI deduction?
A deduction of up to 20% of qualified business income from pass-throughs, subject to income thresholds, wage/property limits, and SSTB rules.
Which part?
Part 2 (Businesses).
Reference?
IRC §199A and Form 8995/8995-A instructions.
Continue studying
More Individual Taxpayer Issues topics from Part 2
Partnership: Partner Basis & K-1 Allocation
Business Entities
S Corporation: S Corp Income/Loss & Distributions
Business Entities
Sole Proprietorship: Sole Proprietorship / Schedule C
Business Entities
Estimated Tax: Estimated Tax for Self-Employed
Individual Taxpayer Issues
Health Insurance: Self-Employed Health Insurance Deduction
Individual Taxpayer Issues
Home Office & Vehicle: Home Office & Vehicle Expenses
Individual Taxpayer Issues
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