Excess Business Loss Calculator

How much of your business loss is deductible this year?

The One Big Beautiful Bill Act made the excess business loss limitation permanent — and, unlike most OBBBA changes, its 2026 threshold is actually LOWER than 2025's. A pass-through owner's net business loss above the threshold does not disappear; it becomes a net operating loss carried into next year instead. This tool runs the numbers for your filing status and year.

Nothing is uploaded. Your numbers are read in this browser and never leave your device — see the privacy note in the footer.

1. Filing status and tax year

Filing status

Tax year

Married filing jointly gets exactly double the other three statuses' shared threshold.

2. Your business numbers

Total trade/business income this year ($)

Total trade/business deductions this year ($)

Aggregate across all your trades or businesses. Wages, interest, dividends, and capital gains outside a business do not belong here — they are what the allowed loss then offsets.

Fill in your filing status, year, and business numbers, then click Calculate.

What this does not cover

Not a full tax return. This computes one limitation on one net figure — not total tax liability, other deductions or credits, or state tax.
Does not compute your net business loss for you. You supply aggregate business income and deductions directly; this tool does not derive them from a Schedule C, K-1, or other source document.
No QBI-deduction interaction. A large business loss can reduce a future year's Section 199A qualified business income deduction — flagged, not computed. See the QBI deduction calculator.
No NOL carryforward valuation. The excess is flagged as an NOL carryforward, but its value in a future year (including the 80%-of-taxable-income limit) is left to a tax professional.

Common questions

What is the excess business loss limitation?

IRC Section 461(l) limits how much of a noncorporate taxpayer's net business loss can offset OTHER income — wages, interest, dividends — in the current year. It was scheduled to expire after 2028; the One Big Beautiful Bill Act made it permanent starting with the 2025 tax year.

What happens to the loss above the threshold?

It is not lost — the excess is added to your net operating loss (NOL) carryforward to next year, where it can offset up to 80% of that year's taxable income under current law, with no carryback for most businesses.

Why is the 2026 threshold LOWER than 2025's?

OBBBA rebased how this threshold is indexed for inflation, resetting it closer to its original 2017 Tax Cuts and Jobs Act base instead of continuing to compound. The result is counterintuitive: $313,000 single/HOH/MFS in 2025 falls to $256,000 in 2026; $626,000 MFJ falls to $512,000. Most OBBBA changes raise a threshold — this one is a rare exception.

Does married filing jointly get double the single threshold?

Yes, exactly double. Single, head-of-household, and married-filing-separately filers all share the same threshold; married filing jointly gets precisely twice that figure, not a separate number of its own.

What counts as the net business loss?

Aggregate income or gain from all your trades or businesses, minus aggregate deductions attributable to those same trades or businesses. Wages, interest, dividends, and capital gains outside a business are not part of this figure — they are what the ALLOWED loss then offsets.

Is this tax advice?

No. This calculator applies the published federal excess-business-loss threshold to the numbers you enter. It does not compute your business income or deductions, model the interaction with the QBI deduction, or verify your filing status, and it is not a substitute for reviewing IRS guidance or consulting a qualified tax professional before you file.