8593 / Are there any exceptions to the rule that limits the QBI deduction based on W-2 wages and UBIA?

Example. Ed, a sole proprietor, owns a business that generates $400,000 worth of QBI for the year. Ed pays $100,000 in W-2 wages and has $100,000 of qualified property. Ed’s wife earns $200,000 for the year, bringing their total joint income to $600,000. Ed’s income is technically below the relevant threshold for complete phase-out for joint returns, but, when combined with his wife’s income, their total income exceeds the annual threshold amount. Therefore, the limitations apply, and the 20 percent deduction no longer applies. Ed’s deduction is limited to the greater of: 50 percent of W-2 wages ($50,000) or the sum of 25 percent of the W-2 wages of the business plus 2.5 percent of the UBIA of all qualified property ($25,000 + $2,500 = $27,500). Ed’s QBI deduction is therefore $50,000.