Yes, it is done this way.
The 20% QBI
deduction calculation compares the difference between 20% of the QBI (your
Schedule C net income, minus any other deductions attributable to your Schedule C
income, which encompasses
deductions such as the solo 401K deduction, Self-Employed Health Insurance
Deduction attributable to the business, and 1/2 of SE tax being deducted on
your return) and 20% of your Adjusted Gross Income (AGI)
(which encompasses other deductions and income amounts) Whichever amount
is lower is the QBI deduction.
Final Regulations on Section 199A deduction (PDF)
