Form 8995 Qualified Business Income

[CuriousJoe]

Folks:
Apologies if I am posting in the wrong section. Not sure where to post.



My accountant has been doing our taxes, and she included Form 8995 Qualified Business Income(QBI) deduction. My spouse is self employed with K-1, and I am on W-2.


I asked the accountant where does the amount on Form 8995 Line 1 Column (c) QBI come from? She said it 'automatically' comes from another Form!! She has no clue!


Can someone shed some light on this?



Based on IRS instructions, it comes from K-1 amount less 1/2 of W-2 wages. When I used this formula, amount did not match (but close)


Thanks

 

[ocean view]

For me, my QBI comes from my 1099-DIV, box 5, Section 199A dividends. We only own VG MFs so one of those funds is throwing off this type of income.

 

[USGrant1962]

Mine comes from Net Profit on Line 31 of Schedule C, for my consulting gig.

 

[CuriousJoe]

Thank you.
We don't have Schedule C, but we have Schedule SE - Self Employment Tax.
Still don't see QBI coming from Sch. SE
Anyway, I will keep researching.

 

[bizlady]

For me, Sched C less self empl tax

 

[braumeister]

For me, my QBI comes from my 1099-DIV, box 5, Section 199A dividends. We only own VG MFs so one of those funds is throwing off this type of income.

Same here. Mine was from the Fidelity 500 Index Fund.

 

[RE2Boys]

Mine comes from Net Profit on Line 31 of Schedule C, for my consulting gig.

Generally, consulting does not qualify for the QBI!

 

[USGrant1962]

Generally, consulting does not qualify for the QBI!

SGOTI tax guy tried to scare me

https://www.irs.gov/instructions/i8995

Exception 1: If your 2020 taxable income before the QBI deduction is less than or equal to $163,300 if single, married filing separately, head of household, qualifying widow(er), or are a trust or estate ($326,600 if married filing jointly), your SSTB is treated as a qualified trade or business.

 

[RE2Boys]

SGOTI tax guy tried to scare me

https://www.irs.gov/instructions/i8995

Very valid point, thank you, something new to learn daily!

 

[USGrant1962]

Very valid point, thank you, something new to learn daily!

I had actually forgotten about that aspect of it, though it is unlikely I will ever net north of $300K and have to worry about it (which is probably why I forgot). Back when QBI was new I spoke with at least one peer who was over the limit - I think driven by his wife's income on top of his consulting.

 

[CuriousJoe]

Thank you all.
With your help, I finally cracked the code!
In our case, QGI = K-1 Income - 1/2 Self Employment Tax
Health Insurance expenses can be deducted also.


I am so proud of myself!!

 

[Sunset]

Thank you all.
With your help, I finally cracked the code!
In our case, QGI = K-1 Income - 1/2 Self Employment Tax
Health Insurance expenses can be deducted also.


I am so proud of myself!!

Great !!

Now the question is: Why is that person your accountant

 

[CuriousJoe]

Sunset, that is the same question I had.
Hopefully from next year on, I will do taxes on my own.

 

[pops]

From K-1, item 20Z, 199A income