Why am I seeing a QBI deduction in my return when I am not self-employed nor a business owner?

[batman1971pdx · Accepted solution]

Hello samyee:

Are you an investor, by chance?  Do you own any Real Estate Investment Trust (REIT) securities, or any Publicly Traded Partnerships (PTP)?  Do you have a Schedule K-1 that you input into your tax return?  Even some mutual fund investments that you may have . . . all can kick off what are known as Section 199A dividends or distributions.  And these all can give rise to a QBI deduction, even where you are not a direct business owner or self-employed Schedule C filer.

This is probably the reason why you are seeing a legitimate QBI deduction, assuming that you've filled out your tax return correctly and followed the TurboTax program interview.

One way to check on that, if you are using TurboTax desktop software, is to open up your tax return in Forms Mode and see where the QBI amount is flowing from.  The in-program QBI worksheets are very detailed, and will direct you to the relevant data entry point of origin.

If you are using TurboTax online, then alternatively you can call customer support, and one of their agents can pull a diagnostic file for you to verify the QBI deduction (basically take a look at your TTO return in TTD desktop mode and read the QBI worksheet).  It should finally be noted that this same QBI worksheet is also available to the user in TTO, once the software has been paid for.

Thank you for asking this very good question.

[samyee]

Thanks for the clarification, batman!  I do have a REIT, so that's where it came from.

[MamaDeerinSnow]

This is a gift that keeps on giving, thanks.  I couldn't figure out where a $51 REIT credit came from.  It had no payer information or anything else to say why this credit appeared for the first time I can remember with many years of TT experience.  Turns out it was from a GNMA mutual fund we've owned since forever.