Form 8995 Calculator
Work out your 2026 QBI deduction and whether you file Form 8995 or Form 8995-A.
Form 8995 QBI deduction calculator (2026)
Form 8995 or Form 8995-A?
The qualified business income (QBI) deduction under section 199A, made permanent by the 2025 tax law, lets owners of sole proprietorships, partnerships, S corporations and some rentals deduct up to 20% of qualified business income. Which form you use depends on taxable income before the deduction (Rev. Proc. 2025-32, 2026):
- Form 8995 (simplified): taxable income at or below $201,750 ($403,500 joint). Deduction = the smaller of 20% of QBI or 20% of taxable income minus net capital gain.
- Form 8995-A: above that. Over the next $75,000 ($150,000 joint) the deduction phases toward a wage limit: the greater of 50% of W-2 wages, or 25% of W-2 wages plus 2.5% of the unadjusted basis of qualified property. Specified service businesses (health, law, accounting, consulting, financial services and similar) lose the deduction entirely above $276,750 ($553,500 joint).
QBI is net business profit after the deductible half of self-employment tax, self-employed health insurance and retirement contributions; it excludes wages you earn as an employee, capital gains and interest.
Worked example
A single freelancer has $80,000 of QBI and $90,000 of taxable income before the deduction. That's under $201,750, so Form 8995 applies: the deduction is the smaller of $16,000 and $18,000, $16,000, worth about $3,520 of tax in the 22% bracket. Plan an S corp salary with the Form 2553 calculator (salary reduces QBI) and check the self-employment tax estimator.
Common questions
What is the 2026 threshold for Form 8995?
$201,750 of taxable income before the QBI deduction, or $403,500 joint.
What is the QBI deduction?
Up to 20% of qualified business income, limited to 20% of taxable income less net capital gain.
When do I use Form 8995-A?
When taxable income is above the threshold, or for certain patrons of cooperatives.
Sources
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Related
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General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.