Yes, the income you received as an independent contractor / self-employed individual, reported on Form 1099-NEC, can qualify you for the Qualified Business Income Deduction.
If you incurred business expenses during that time, you can report them in TurboTax, which will result in completing a Schedule C. You might need to upgrade your product to file Schedule C. The net income after expenses would be used in determining whether you receive a QBI deduction.
TurboTax will automatically calculate the Qualified Business Income Deduction if your entries and answers to questions show that you are qualified for the deduction.
The Qualified Business Income (QBI) deduction allows non-corporate taxpayers to deduct up to 20% of their qualified business income. See this help article for more information. For the purposes of the deduction, QBI is defined as net business income, excluding:
- Income generated outside the United States
- Investment income
- W-2 compensation paid to an S corporation owner
- Guaranteed payments to a partner
- Income from REITs, publicly traded partnerships, and qualified cooperatives (these entities may qualify for a 20% deduction under a different set of rules, the explanation of which is beyond the scope of this FAQ).
This deduction applies to Schedule C filers (sole proprietorships and other self-employed businesses), LLCs, partnerships, S corporations, estates, and trusts. Certain rental enterprises may also qualify.
Your deduction for business use of your home may not exceed your business net income (gross income derived from the qualified business use of the home minus business deductions).
Please see this TurboTax article and IRS Publication 587 for more information on the deduction for business use of a home.
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