I have two business that qualify for the QBI deduction. Form 8895 for one has the correct QBI amount. The second 8895 form has zero for the QBI amount. How to fix it?

[mronufrak]

The first business is a rental, which qualifies. The second business is a small law office, which also qualifies. I can't find any prompt that relates to this. Can anyone tell me how to fix the QBI amount?

[Mike9241]

The law firm is what is referred to for QBI purposes as a specified service trade or business (SSTB). the calculation differs for a SSTB.  

you'll need to review form 8995 or 8995A (read the top of the form to see which to use).  if you are using online you'll need to pay your Turbotax fees before you can review the form 

here's a link to the federal form which you might want to complete manually to see the results.

 however, if you are filing other than joint you get no deduction if your taxable income before the QBI deduction is over $241,950 for joint the amount is $483,900

https://www.irs.gov/site-index-search?search=8995&field_pup_historical_1=1&field_pup_historical=1 

note that for the law firm net income,  QBI would be schedule C net income. less 1/2 your SE tax. less retirement contributions based on the income. less any deduction for self-employed medical insurance

[mronufrak]

Hi Mike,

The last paragraph is helpful, but I still don't know how I can fix form 8995,which doesn't property reflect my QBI.

[ThomasM125]

There must be a reason the law practice net income is not being reflected as qualified business income (QBI). If you are reporting that income off of a K-1 schedule, for a partnership or S corporation, you need to look at the entries in box 20 (code Z) on a partnership K-1 and box 17 (code V) on an S corporation return to insure that you entered the correct QBI income.

If you are working as a sole proprietor, you need to make sure your income qualifies as QBI. You will see a question asking if your income qualifies for QBI after you enter your income and expenses. If your income is over $214,900 single or $429, 800 joint filer then your income does not qualify for QBI treatment. Also, capital gain income, dividend income, self-employment tax, self-employed health insurance and retirement plan contributions can limit your QBI income.  

[mronufrak]

Well Thomas, I was able to get to the bottom of this.

My law firm income qualifies as QBI.  My income is under the threshold.  I didn't do a K-1.  I filled out all of the step by step questions appropriately and did them several times just to make sure.   Nevertheless, TT kept giving me 0 for total QBI.

I opened Schedule C and saw that TT must be programmed wrong because it did a calculation causing the wrong information to be populated in the QBI Deduction Smart Worksheet.  It took my correct net income, subtracted my deduction for self-employment tax in 5b, and inserted the difference into 5a as the cost of my self-insured health insurance!   Bizarre.  So, of course the net profit after all deductions was zero, yielding no QBI deduction.   I had to go in and manually insert my correct self-insured health insurance amount.

Honestly, this is the third BIG mistake I have had to wrestle with in TT Premier this year.   I'll think twice before buying TT again next year.