I am a sole proprietor LLC looking to use section 199a to deduct 20% QBI. I was told by my tax professional that I can use this and did with no issues. When my return is reviewed it asks me if I am a general or limited partner for my K1, but I did not receive a K1. He said that is normal and to select General for that field. Has anyone else had to do this? Is this the correct method to deduct QBI?
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A K-1 is issued by an S-Corp or a Partnership. If you do not have one of these or another business did not issue your LLC one, then you made an incorrect entry somewhere. If you have a sole proprpietorship, that would not issue you a K-1. You would enter all income and deductions on your Schedule C. Please see the screen shot below.
QBI is calculated automatically based on your answers for your Schedule C.
Q1. What is the Qualified Business Income Deduction?
A1. Section 199A of the Internal Revenue Code provides many taxpayers a deduction for qualified business income from a qualified trade or business operated directly or through a pass-through entity. The deduction has two components.
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