No, the QBI deduction doesn't reduce your SEP contribution. Instead, the SEP reduces your QBI deduction. Here is an explanation of how this flow works.
- Gross Business Income - Expenses = Net Profit
- Net Profit - 1/2 SE Tax = Adjusted Net Earnings
- Adjusted Net Earnings × 20% = Max SEP Contribution
- (Adjusted Net Earnings - SEP Contribution) × 20% = Potential QBI Deduction
Assuming $213,665 is the adjusted net earnings amount, your maximum SEP contribution should be $42,733, and the QBI is $34,186. Based on this, it sounds like there's an entry mistake or calculation mistake. Additionally, the $29,000 for your QBI is calculated using the $70,000 maximum SEP contribution.
I would suggest the following.
- Delete and Re-calculate.
- Go to Tax Tools > Tools > Delete a Form. If using TurboTax desktop, go to the forms mode in your program.
- Find the Keogh/SEP/SIMPLE Contribution Worksheet. Delete it.
- Log out or close your return to save your changes.
- Reenter the "Self-Employed Retirement" section. This should pull your data from Schedule C and provide a cleaner copy.
If this doesn't work, we may need to see a diagnostic copy of your return to determine if the worksheets are calculating your SEP contribution and QBI correctly.
@peterhsiegel
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
