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Level 1

## Should I get an entry on 1040 line 9 equal to 20% of the same positive net income number on Schedule C, line 31; Schedule 1, line 12; and Schedule SE, line 3?

The program does enter 0 (zero) on line 9 of 1040.

I think the 1040 line 9 entry should be 20% of the net income seen on all of the three forms mentioned in my question.  Agree?

6 Replies
Level 1

## Should I get an entry on 1040 line 9 equal to 20% of the same positive net income number on Schedule C, line 31; Schedule 1, line 12; and Schedule SE, line 3?

Could someone please advise where in the IRS instructions it discusses Schedule C line 31 being reduced by the deductible portion of the SE tax before the 20% calculation? Why isn't this part of the QBID worksheet?
Level 20

See below.
Level 7

## Should I get an entry on 1040 line 9 equal to 20% of the same positive net income number on Schedule C, line 31; Schedule 1, line 12; and Schedule SE, line 3?

No, your QBID will be less than your Schedule C net income because of SE adjustments.  You can use Forms Mode to view your Schedule C and QBI Worksheet.  And you have to complete your schedule C before you will be asked the question about the QBI.  Until you come to that question, nothing will be transferred to your 1040.  So, be sure to go through the entire interview.  See screen image below.

Here is the basic calculation:

Income Levels under \$157,500 (\$315,000 if filing jointly): The calculation is straightforward — 20% is applied to QBI or taxable income minus capital gains and dividends (whichever is less) to come up with the deduction.

For income levels over the above, see details of the calculation in the FAQ below.  https://ttlc.intuit.com/replies/7019998

Level 20

## Should I get an entry on 1040 line 9 equal to 20% of the same positive net income number on Schedule C, line 31; Schedule 1, line 12; and Schedule SE, line 3?

Form 1040 line 9 will always be less than 20% of Schedule C line 31 because line 31 must be reduced at least by the deductible portion of SE taxes.  It will also be reduced by the amount of any SE health insurance deduction and SE retirement deduction.  As TurboTax DawnC indicated, your QBI is also be limited to no more than taxable income less capital gains.
Level 1

## Should I get an entry on 1040 line 9 equal to 20% of the same positive net income number on Schedule C, line 31; Schedule 1, line 12; and Schedule SE, line 3?

Could someone please advise where in the IRS instructions it discusses Schedule C line 31 being reduced by the deductible portion of the SE tax before the 20% calculation? Why isn't this part of the QBID worksheet?
Level 20

## Should I get an entry on 1040 line 9 equal to 20% of the same positive net income number on Schedule C, line 31; Schedule 1, line 12; and Schedule SE, line 3?

Treasury Department Final Regulations published on January 15, 2019, section IV.A.5 on page 43 :
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-drop/td-reg-107892-18.pdf">https://www.irs.gov/pub/irs-drop/td-reg-10789...>