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acls2x
Level 2

QBI dedcution

I am a sole proprietor. I have a solo 401 K but for purposes of this question I am not entering a contribution to it. If I enter 7000 as a contribution to a traditional IRA for my wife, Turbo tax is entering this on line 19 of schedule 1. This is reducing my qualified business income and thus my QBI deduction. First my wife is not a part of my business and has her own income source (SSI). Is this right? Maybe the rules changed this year but I ma reading things saying that a traditional IRA contribution should not reduce QBI

 

I could  this as reasonable it if I contributed 7000 to a traditional IRA instead of my solo 401K as i have no W-2 income. Should I be able to also contribute to a traditional IRA without reducing my QBI 

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Accepted Solutions
DawnC
Employee Tax Expert

QBI dedcution

A traditional IRA contribution does not reduce your QBI, but it does reduce your taxable income.   And your QBI deduction is 20% of either taxable income (minus capital gains and dividends) or the QBI, whichever is less.   

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5 Replies
ThomasM125
Employee Tax Expert

QBI dedcution

An traditional IRA contribution should not reduce your QBI, if from you or your spouse.

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acls2x
Level 2

QBI dedcution

That's what I thought but turbotax home and business is filling it in this way when using the interview forms. Is there a way to report it? I filled it in and eliminated it a few times to be sure. The QBI changes based on what I put in for a traditional IRA contirbution

acls2x
Level 2

QBI dedcution

Meant report it to turbo tax support?

DawnC
Employee Tax Expert

QBI dedcution

A traditional IRA contribution does not reduce your QBI, but it does reduce your taxable income.   And your QBI deduction is 20% of either taxable income (minus capital gains and dividends) or the QBI, whichever is less.   

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**Mark the post that answers your question by clicking on "Mark as Best Answer"

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acls2x
Level 2

QBI dedcution

Thank you that's what I was missing. Makes sense

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