SSTB List: Which Businesses Lose the QBI Deduction
A specified service trade or business (SSTB) is one in health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, investing, trading or dealing in securities, or one whose main asset is an owner’s reputation or skill. Doctors and consultants are SSTBs; architects, engineers, and real estate and insurance agents and brokers aren’t. For 2026, an SSTB’s 20% QBI deduction phases out above $201,750 of taxable income ($403,500 joint) and is gone at $276,750 ($553,500 joint).
The SSTB categories under IRC 199A(d)(2) and Reg. 1.199A-5 are: (1) Health care (physicians, dentists, nurses, veterinarians, physical therapists, psychologists). (2) Law (attorneys, paralegals in a law firm). (3) Accounting (CPAs, enrolled agents, bookkeepers in an accounting firm). (4) Actuarial science. (5) Performing arts (musicians, actors, singers, entertainers). (6) Consulting (providing advice and counsel to clients). (7) Athletics (athletes competing in athletic events). (8) Financial services (wealth management, financial planning, securities trading). (9) Brokerage services (securities brokers; the regulations exclude real estate agents and brokers and insurance agents and brokers). (10) Any trade or business where the principal asset is the reputation or skill of one or more employees or owners (narrowly interpreted by the final regulations to mean only businesses that earn income from endorsements, appearances, or licensing of a person’s name/image). Businesses that are NOT SSTBs despite appearing similar: real estate agents and brokers, insurance agents and brokers, architects, engineers, construction contractors, fitness trainers, pet groomers, photographers, event planners (if primarily execution), tutors (if primarily instruction), cleaning businesses, landscapers, plumbers, electricians, HVAC technicians, manufacturers, retailers, restaurants, and most trades.
Which businesses are definitely SSTBs?
Health care: Any business that provides medical or health services. This includes doctors, dentists, chiropractors, optometrists, veterinarians, physical therapists, occupational therapists, speech therapists, psychologists, psychiatrists, and nurses in private practice. Pharmacies that only fill prescriptions (and do not provide health services) are NOT SSTBs.
Law: Law firms and legal service providers. Paralegals employed by a law firm are part of the SSTB. A document preparation service (not providing legal advice) is NOT an SSTB.
Accounting: CPA firms, enrolled agent practices, tax preparation firms, and bookkeeping firms. A payroll processing company that does not provide accounting advice may not be an SSTB.
Consulting: Businesses that primarily provide advice and counsel to clients. Marketing consultants, management consultants, IT consultants, and business coaches are SSTBs under the consulting category. The regulations clarify that consulting does not include “the performance of services other than advice and counsel,” which means an IT company that builds and deploys systems (not just advises) may not be an SSTB.
Financial services: Wealth management, financial planning, investment advisory, retirement planning, and securities trading.
Performing arts: Musicians, actors, singers, and entertainers who earn income from performing. A music teacher who teaches lessons but does not perform is NOT an SSTB under performing arts (but may be under consulting if the teaching is advisory in nature).
Which businesses are in the gray zone?
Coaching: Most coaching (business coaching, life coaching, executive coaching) is an SSTB under “consulting” because the coach provides advice and counsel. Fitness coaching that involves physical instruction (not just advice) may be non-SSTB.
Real estate: Real estate agents and brokers are NOT SSTBs: Reg. 1.199A-5 excludes them from brokerage services. Property management is NOT an SSTB. Real estate investment is NOT an SSTB.
Insurance: Insurance agents and brokers are NOT SSTBs: Reg. 1.199A-5 excludes them from brokerage services, and the financial services definition doesn’t list them.
Marketing agencies: Agencies that primarily provide strategic consulting are SSTBs. Agencies that primarily execute (design, content creation, ad management) have a strong argument for non-SSTB classification.
Architecture and engineering: Specifically excluded from the SSTB list. Congress considered including them but did not. Architecture and engineering firms are NOT SSTBs.
How do I choose the right tax professional for my business?
Look for a CPA or enrolled agent (EA) with experience in your specific industry and business structure. CPAs are state-licensed and must meet continuing education requirements. EAs are federally licensed and specialize in tax representation before the IRS. Ask about their experience with businesses of your size and type, their availability during off-season for planning, and whether they handle IRS notices and audits. Avoid preparers who promise unusually large refunds or base their fee on a percentage of your refund. A good tax professional will proactively identify planning opportunities, not just prepare the return after the year ends.
What are the most important tax deadlines for small business owners?
The federal income tax return deadline depends on your entity type. Sole proprietors (Schedule C) and single-member LLCs file with Form 1040 by April 15. S-Corps (Form 1120-S) and partnerships (Form 1065) file by March 15, which is earlier because they issue K-1s that individual partners need for their personal returns. C-Corps (Form 1120) file by April 15. All deadlines shift to the next business day if they fall on a weekend or holiday. Extensions are available (generally 6 months, including for partnerships and S-Corps), but an extension to file is not an extension to pay. Estimated taxes are due quarterly on April 15, June 15, September 15, and January 15.
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Yarik Yarosh, CPA. "SSTB List: Which Businesses Lose the QBI Deduction." Blue Cloud CPA, September 5, 2026, updated October 16, 2026. https://bluecloudcpa.com/guides/small-business-sstb-complete-list
This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.