199A Deduction Threshold Amount
For the 199A deduction the term “threshold” is used to both phase out and phase in limitations.
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Specified Service Trades or Businesses – When used in conjunction with the 199A computation for SSTBs, the term threshold refers to the taxable income (TI) level at which the 199A deduction begins to phase out for higher income taxpayers.
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Qualified Trades or Businesses - When used in conjunction with the 199A computation for qualified trades or businesses, the term threshold refers to the TI level at which the wage limitation begins to phase in for higher income taxpayers.
The 199A threshold is the same threshold as for the 32% tax bracket. Thus for 2025 it is $394,600 for married taxpayers filing jointly, $197,300 for married filing separately, or $197,300 for other filing statuses.
Phaseout Cap
Although there is no official name assigned to the top of the phase-out/phase-in range, we will refer to it as the phaseout cap in this guide; some call it a ceiling. The cap is reached when the taxpayer has an additional $100,000 of taxable income for married filing joint taxpayers and $50,000 for others (the delta amount). It is the sum of the threshold amount and the delta amount for a taxpayer’s filing status. So, for 2025, for MFJ taxpayers it is $494,600 ($394,600+ $100,000), $247,300 ($197,300 + $50,000) for MFS and others.