Our return shows a “Qualified business income deduction” - but we have no business or business income. What’s going on?

[mesquitebean]

I'm a fellow user, not a tax expert, but I can tell you something to check that can generate the QBI calculation and deduction.   There are likely other things, but this is one common explanation.   See if it pertains to you.

If you have investments such as EFTs, mutual funds, etc. that yield dividends, and if any of your holdings invest in REITs (real estate investment trusts), you could have what is called "Section 199A Dividends."    Those types of dividends get a 20% deduction and show up in the QBI calculation.   Look on your 1099-DIV.   Is there anything in Box 5, Sec. 199A Dividends?

If you have such, it should generate a Form 8995 (or 8995-A), and the result flow to Form 1040, Line 13.

It's also possible to have Section 199A amounts from a K-1, if applicable.

[travelclipps · Accepted solution]

The Box 5 - 199A looks to be the answer. Thank you.

[mesquitebean]

Great!  You're welcome.  Good luck.