2024 QBI Deduction Threshold
For 2024, the QBI Deduction Threshold is $383,900 (Threshold, joint filers), $191,950 (Threshold, single filers), $483,900 (Phase-in range top, joint filers) and $241,950 (Phase-in range top, single filers).
| Item | Joint filers | Single filers |
|---|---|---|
| Threshold | $383,900 | $191,950 |
| Phase-in range top | $483,900 | $241,950 |
Effective 2024-01-01Source: Rev. Proc. 2023-34 (IRS)Verified 2026-08-29
Compared with 2023
| Item | 2023 | 2024 | Change |
|---|---|---|---|
| Threshold, joint filers | $364,200 | $383,900 | +$19,700 (+5.4%) |
| Threshold, single filers | $182,100 | $191,950 | +$9,850 (+5.4%) |
| Phase-in range top, joint filers | $464,200 | $483,900 | +$19,700 (+4.2%) |
| Phase-in range top, single filers | $232,100 | $241,950 | +$9,850 (+4.2%) |
Who it applies to
Taxpayers who claim the QBI deduction on their 2024 federal income tax returns, including owners of pass-through businesses, sole proprietors, and certain rental real estate activities.
What changed this year, and why
The IRS published the inflation-adjusted thresholds for the qualified business income deduction under section 199A for taxable years beginning in 2024. These figures determine when the wage and qualified property limitations begin to apply and when the deduction is fully phased in.
Common questions
- What is the QBI deduction threshold for 2024?
- For taxable years beginning in 2024, the QBI deduction threshold is $383,900 for married individuals filing joint returns and $191,950 for single filers, married individuals filing separate returns, and all other taxpayers. If taxable income is at or below the threshold, the full QBI deduction is generally available without regard to the wage and qualified property limitations.
- What is the phase-in range for the QBI deduction in 2024?
- For taxable years beginning in 2024, the phase-in range top is $483,900 for married individuals filing joint returns and $241,950 for single filers, married individuals filing separate returns, and all other taxpayers. Within this range - between the threshold amount and the phase-in range top - the wage and qualified property limitations are gradually applied. Once taxable income exceeds the phase-in range top, the full limitations apply.
Every amount on this page is a published figure rather than yours. The QBI deduction threshold headroom takes the number you enter and works it out against them, showing which published figure it used.
Above the threshold, the wage and property limits phase in
Once taxable income passes the threshold, the wage and property limits do not apply in full right away. Instead, the reduction is phased in over a range. For 2024, the phase-in range spans from $383,900 to $483,900 for married taxpayers filing jointly, and from $191,950 to $241,950 for single filers and all other returns. Within that band, the portion of the wage-or-property reduction that must be applied grows gradually as income rises. Taxpayers whose taxable income lands above the phase-in range top ($483,900 joint, $241,950 other) must apply the full wage and property limit to every qualified trade or business. Those at or below the threshold owe no reduction at all. The phase-in rule ensures that the transition from an unrestricted QBI component to a fully limited one is smooth rather than abrupt.
If your taxable income (before the QBI deduction) is: • At or below the threshold, you don’t need to reduce your QBI; • Above the threshold but below the phase-in range (more than $383,900 and $483,900 if married filing jointly, and $191,950 and $241,950 for all other returns), the reduction is phased in; or • Above the threshold and phase-in range, the full reduction applies.
2024 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
What the reduction is measured against
When taxable income (before the deduction) exceeds the applicable threshold, the qualified business income from each trade or business may be partially or fully reduced. The reduction measures QBI against a floor defined by wages and the unadjusted basis of qualified property. Specifically, QBI cannot be reduced below the greater of two amounts: half of the wages paid by the qualified trade or business, or one-quarter of those wages plus a percentage of the unadjusted basis immediately after acquisition of qualified property held by the business. These wage and property limits therefore set the minimum level of QBI that can still be counted once taxable income is above the threshold and the phase-in range has been completed.
your QBI for each of your trades or businesses may be partially or fully reduced to the greater of 50% of W-2 wages paid by the qualified trade or business, or 25% of W-2 wages plus 2.5% of the UBIA of qualified property from the qualified trade or business.
2024 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
Specified service businesses above the range
Specified service trades or businesses are generally excluded from the definition of a qualified trade or business when a taxpayer’s taxable income, before the deduction, exceeds the threshold plus the phase-in range. For 2024, that means the exclusion applies once taxable income is above $483,900 for married filing jointly or above $241,950 for single filers and other returns. When such a business is excluded, none of its income, wages, or unadjusted basis of qualified property are taken into account when figuring the deduction. If the service business is conducted through a pass-through entity, the same limitation applies to the pass-through items. Taxpayers whose income falls within the phase-in range may still take a partial amount into account, but those above the top of the range lose the benefit entirely for that business.
SSTBs are generally excluded from the definition of a qualified trade or business if the taxpayer's taxable income exceeds the threshold plus the phase-in range.
2024 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
The deduction is also capped by taxable income
The total QBI deduction is the sum of the QBI component and the qualified REIT and qualified PTP component. However, regardless of how that sum is calculated, the deduction cannot exceed 20% of taxable income, calculated before the QBI deduction, minus any net capital gain (increased by any qualified dividends). This overall taxable income limit applies in addition to the wage and property limits that may reduce the QBI component for higher-income taxpayers. As a result, the final deduction is the lesser of this amount or 20% of taxable income minus net capital gain, ensuring the benefit never exceeds one-fifth of the taxpayer’s income after capital gains are excluded.
However, the deduction is limited to the lesser of this amount or 20% of your taxable income, calculated before the QBI deduction, minus your net capital gain (increased by any qualified dividends).
2024 Instructions for Form 8995-A, Deduction for Qualified Business Income (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2023-34 (IRS)
- Threshold, joint filers
Married Individuals Filing Joint Returns $383,900 $483,900
- Threshold, single filers
All Other Returns $191,950 $241,950
- Phase-in range top, joint filers
Married Individuals Filing Joint Returns $383,900 $483,900
- Phase-in range top, single filers
All Other Returns $191,950 $241,950