QBI, HSA, Retirement & AMT — Advanced Deductions Made Simple for Self-Filers (2026 Edition)
The 2026 tax season includes several powerful deductions that most taxpayers never fully use — including the 20% QBI deduction, HSA contributions, IRA and 401(k) limits, and the often-misunderstood Alternative Minimum Tax (AMT).
These rules can dramatically lower your taxable income when used correctly.
1) QBI Deduction — The 20% Pass-Through Deduction
The Qualified Business Income (QBI) deduction allows many self-employed taxpayers to deduct 20% of their net business income — even if they take the standard deduction.
✔ Who qualifies?
- Schedule C businesses
- Sole proprietors
- Single-member LLCs
- Some rental activities (case-by-case)
✔ How QBI is calculated
QBI generally equals:
The result × 20% = your QBI deduction.
✔ Example
Net income: $50,000
QBI = 50,000 × 20% = $10,000 deduction Even if you take the standard deduction — QBI still applies.
2) SSTB Rules & Income Limits
Some businesses — called SSTBs (Specified Service Trades or Businesses) — have income limits that restrict or phase out QBI.
✔ SSTB industries include:
- Law
- Health
- Accounting
- Consulting
- Athletics
- Financial services
✔ When QBI phases out
If your taxable income exceeds IRS thresholds, you may receive a reduced QBI deduction or none at all.
If taxable income rises above SSTB limits, QBI begins to phase out — reducing the 20% deduction.
3) HSA Contributions — Triple Tax Benefits
HSAs — available to those with High-Deductible Health Plans (HDHPs) — offer the rare “triple tax advantage”:
- Tax-deductible contributions
- Tax-free growth inside the account
- Tax-free withdrawals for medical expenses
2026 Contribution limits:
- Self-only: approx. $4,300
- Family: approx. $8,550
- Catch-up (age 55+): +$1,000
A self-employed taxpayer contributes $4,000 to an HSA.
That lowers taxable income AND increases their QBI deduction because QBI is calculated after HSA contributions.
4) Retirement Contributions — IRA, Roth, 401(k)
Retirement accounts are among the strongest tax reduction tools available:
✔ Traditional IRA
- Tax-deductible contributions
- Lower AGI
- May increase eligibility for education credits or QBI
✔ Roth IRA
- No deduction upfront
- Tax-free withdrawals in retirement
- Income limits apply
✔ 401(k) / Solo 401(k)
- High contribution limits
- Reduces taxable income immediately
- Solo 401(k): perfect for Schedule C filers
Contributing $3,000 to a Traditional IRA may lower AGI enough to qualify for the Lifetime Learning Credit or increase CTC eligibility.
5) AMT — The Alternative Minimum Tax (Simplified)
AMT ensures high-income taxpayers pay at least a minimum tax.
Most Americans are not affected — but certain deductions increase AMT risk.
✔ AMT is triggered by:
- High income + large deductions
- Incentive stock options (ISO exercises)
- Large state/local taxes (SALT)
- Depreciation adjustments
A high-income taxpayer with large SALT and incentive stock options may owe AMT even though they already paid regular tax.
6) How to Combine These for Maximum Savings
✔ Strategy 1: Lower taxable income to increase QBI
HSA + Traditional IRA + 401(k) contributions reduce taxable income and increase your allowable QBI deduction.
✔ Strategy 2: Use HSA first if eligible
HSA provides a stronger tax benefit than traditional IRA for many taxpayers.
✔ Strategy 3: Track depreciation carefully
Rental property depreciation affects both QBI and AMT calculations.
✔ Strategy 4: Keep income within SSTB limits
Smart timing (deferring revenue or accelerating expenses) can preserve the QBI deduction for service businesses.
7) Top 3 Google FAQs (2026)
Yes — QBI applies whether you itemize or not.
Yes — and doing both can reduce taxable income significantly.
If you exercised stock options, have high SALT deductions, or high income plus itemizing — you may need to calculate AMT.