Can you respond to the meaning of the term "GROSS INCOME" in the IRS Regulations for Section 199A(c) on Page 44 you quoted above. In using Turbo Tax, Schedule 1 (Addition Income and Adjustments to Income) subtracts the 401K contribution (elected deferral and profit sharing), HSA contribution, and SE Tax amount from my self-employed business schedule C NET PROFIT/LOSS (Schedule C-Line 31). It would seem that IRS is stating in their Final 199A regulations above that the Schedule 1 form should deduct the 401K and HSA Contributions and SE Tax from the GROSS INCOME which is Schedule C Line 7. Can you please address this, as the regulations do not say NET Profit/Loss, the regulations clearly state," Thus, for purposes of section 199A,
deductions such as the deductible portion of the tax on self-employment income under
section 164(f), the self-employed health insurance deduction under section 162(l), and
the deduction for contributions to qualified retirement plans under section 404 are
considered attributable to a trade or business to the extent that the individual’s GROSS INCOME
from the trade or business is taken into account in calculating the allowable
deduction, on a proportionate basis.
Please explain why Turbo Tax is reducing the QBI Deduction against Net Profit and not Gross Income. Thank you,
