Section 199A Pass-Through Deduction: 2026 Phase-Out Thresholds

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For 2026, the Sec­tion 199A deduc­tion phase-out for spec­i­fied ser­vice trades or busi­ness­es (SST­Bs) begins at $197,300 for sin­gle fil­ers and $394,600 for mar­ried fil­ing joint­ly. If your qual­i­fied busi­ness income exceeds the thresh­old, the deduc­tion is par­tial­ly or ful­ly dis­al­lowed.

Enti­ty struc­ture, rea­son­able com­pen­sa­tion, and W‑2 wage elec­tions can all be used to opti­mize the deduc­tion before year-end.