Turbo Tax (on line version) question on a phantom QBI deduction showing up and how to get rid of it.

[tominboise]

I am doing our taxes in the Turbo Tax on line version (I have done so for many years). I download the 1099's etc from Vanguard and Fidelity into it directly. Going through the review it shows a $49 QBI deduction for some reason. Looking through the 1099's I can't find any line item associated with this deduction. I would like to find it in the system and kill it, but don't know how to.

 

[Morgan22]

I'm guessing you hold VTI? I believe the QBI deduction is 20% of box 5 on your 1099.

 

[engineernerd]

I too had to research what "Section 199A dividends" were. You're entitled to that deduction if you want it, and since TurboTax undoubtedly fills everything out for you, why not claim it?

 

[Al18]

In TT, search for QBI
There's a QBI worksheet that shows how it's calculated

 

[tominboise]

I'm guessing you hold VTI? I believe the QBI deduction is 20% of box 5 on your 1099.

Yeah, the 1099's I have, have nothing in box 5, which is where my confusion starts.

 

[engineernerd]

Yeah, the 1099's I have, have nothing in box 5, which is where my confusion starts.

Oh. I take it you haven't received any Forms K-1, either? If not, 'tis a mystery. Good luck!

 

[Midpack]

In TT, search for QBI
There's a QBI worksheet that shows how it's calculated

That's where I'd start, it's form 8995, and TT must have included it. If not current year, prior year carryover?

 

[tominboise]

That's where I'd start, it's form 8995, and TT must have included it. If not current year, prior year carryover?

No carryover that I know of and I am having trouble getting TT to show me the actual Form 8995 that it is using. The search bar just returns 700 topics about form 8995.

 

[SecondCor521]

Self employment income can also generate a QBI deduction. Do you have a Schedule C with net business income of around $245? A Schedule C might have been created if you have a 1099-NEC or 1099-MISC.

If you've paid for TT, you should be able to look at the actual tax return and follow the bouncing ball backward from Form 8995.

 

[tominboise]

Self employment income can also generate a QBI deduction. Do you have a Schedule C with net business income of around $245? A Schedule C might have been created if you have a 1099-NEC or 1099-MISC.

If you've paid for TT, you should be able to look at the actual tax return and follow the bouncing ball backward from Form 8995.

I do not have any schedule C that I know of. I need to pay TT and then it will let me search for the form. Interesting issue.

 

[MissMolly]

No carryover that I know of and I am having trouble getting TT to show me the actual Form 8995 that it is using. The search bar just returns 700 topics about form 8995.

Open TurboTax. Choose "Continue" with your tax return. Go to the black bar at the top. Click on "View" then "Forms" and scroll down to Form 8995 and click on it.

 

[tominboise]

This is all I can find on my tax return. This is starting to get frustrating.

 

[MissMolly]

This is all I can find on my tax return. This is starting to get frustrating.View attachment 54473

Did you do what I said in the post above?

 

[SecondCor521]

Do you own any REITs in any taxable accounts?

 

[MissMolly]

Do you own any REITs in any taxable accounts?

How would TurboTax know that?

 

[cathy63]

I think the only forms that can lead to QBI are: Schedule C; 1099-DIV; K-1; 1099-PATR; W-2 for statutory employees.

If none of the others apply to you, then take another look at your 1099-DIVs and verify they were all imported correctly. It's possible that one of your financial institutions has a bug and created a bad transfer file.

 

[SecondCor521]

How would TurboTax know that?

It wouldn't, but the OP might. REITs can generate QBI (see screenshot in #12). If OP said yes, I would suggest checking the associated 1099. Just trying to solve the puzzle from a different angle.

 

[MissMolly]

It wouldn't, but the OP might. REITs can generate QBI (see screenshot in #12). If OP said yes, I would suggest checking the associated 1099. Just trying to solve the puzzle from a different angle.

Hmmm. OK. I asked because I also have a small amount on that form and although I have REITs at no time did I input that info anywhere. So trying to figure it out for myself too. I figured since I have REITs it must be valid, but just can't figure it out. Or maybe for me there is still some carry over from being a 1099 contractor. But that ended in 2021. It's such small amount I decided not to worry about it.

 

[audreyh1]

If you have REITs or REIT funds, you likely have QBI income. If you have index funds you likely have QBI income as many of these include REITs.

 

[misshathaway]

I don't remember the fine points but there is a long thread about this from 2 years ago (look up QBI) on the TT support forum. It can come from a Vanguard mutual fund and it is legit as it's based on a holding in the fund.

 

[cathy63]

Hmmm. OK. I asked because I also have a small amount on that form and although I have REITs at no time did I input that info anywhere. So trying to figure it out for myself too. I figured since I have REITs it must be valid, but just can't figure it out. Or maybe for me there is still some carry over from being a 1099 contractor. But that ended in 2021. It's such small amount I decided not to worry about it.

Look at your 1099-DIVs and see if any of them has a number in Box 5. Add those up and multiply by 20%. That should match the QBI on your 1040.

 

[MissMolly]

Look at your 1099-DIVs and see if any of them has a number in Box 5. Add those up and multiply by 20%. That should match the QBI on your 1040.

Oh that’s it! Thank you!

 

[tominboise]

Do you own any REITs in any taxable accounts?

I do not own any REITs in my taxable (or non taxable) accounts. The mystery continues.

 

[tominboise]

I don't remember the fine points but there is a long thread about this from 2 years ago (look up QBI) on the TT support forum. It can come from a Vanguard mutual fund and it is legit as it's based on a holding in the fund.

This may be it - looking at my Vanguard 1099, five of the funds I hold in there reported some small percentage 0.10% as Agency bonds labeled as Fed Home Loan. So maybe that is where this is coming from.

 

[tominboise]

Look at your 1099-DIVs and see if any of them has a number in Box 5. Add those up and multiply by 20%. That should match the QBI on your 1040.

That is it, in my case. Thank you very much for this tip.