topic QBI - why this year but not in 2019, 2018? in Deductions & credits

QBI - why this year but not in 2019, 2018?

MGNH — Mon, 05 Apr 2021 17:04:48 GMT

My self-employed situation has not changed, except for receiving a 1099-NEC this year instead of the former 1099-MISC. In my 2020 return (which I just filed), I was asked questions about and received the QBI deduction -- resulting in a huge refund. This did not come up at all in the prior two years' returns! I'm concerned that I did something wrong THIS year OR that I need to file amended returns for the other two years. (Why didn't TurboTax ask me about QBI in the prior years?)

Re: QBI - why this year but not in 2019, 2018?

JeffreyR77 — Mon, 05 Apr 2021 18:43:31 GMT

The qualified business income deduction came about in the 2017 Tax Cuts and Jobs Act.

If your situation is basically unchanged in 2018, 2019, and 2020 you should review those 3 years' returns to determine if there was an oversight that can be remedied by amending your return for the QBI deduction.

While you are at it, check for any overlooked expenses as well.

What is the Qualified Business Income (QBI) deduction?

Expenses You May Have as a Self-Employed Person

Re: QBI - why this year but not in 2019, 2018?

MGNH — Mon, 05 Apr 2021 19:10:47 GMT

Thank you, that's somewhat reassuring. However, I am mighty curious why TurboTax didn't ask me those questions in the prior years!

Re: QBI - why this year but not in 2019, 2018?

JamesG1 — Mon, 05 Apr 2021 20:06:19 GMT

Review previous year's tax returns to see whether you received the deduction.

2019 Federal 1040 showed qualified business income deduction on line 10.

2018 Federal 1040 showed qualified business income deduction on line 9.

Re: QBI - why this year but not in 2019, 2018?

MGNH — Mon, 05 Apr 2021 20:18:42 GMT

JamesG1, thx for the pointers. My 2019 return line 10 shows $5. My 2018 return line 9 shows $0.

Re: QBI - why this year but not in 2019, 2018?

JamesG1 — Mon, 05 Apr 2021 22:41:44 GMT

Are you able to view the remaining pages of the tax returns?

IRS form 8995 or 8995-A computes the deduction.

QBI Deduction Summary also reports the calculation for the deduction in the current year tax returns. Do not know if it has always been called that.

Re: QBI - why this year but not in 2019, 2018?

MGNH — Tue, 06 Apr 2021 00:53:28 GMT

JamesG1, yes. In 2018, I had no Form 8995. Therefore, if I did 2020 correctly with the QBI, then I completely blew it in 2018.

In 2019, there was a Form 8995. In comparison to 2020:
- Lines 1a, 1b, 1c, 4, and 5 are blank
- The REIT dividend section is fine (lines 6-10)
- The income/cap. gains section looks fine (lines 11-14)
- And not surprisingly, line 15 totals all of $5.

Therefore if I did 2020 right (correctly entered my sole proprietor/self-employed-ness), I obviously did something quite different in 2019. 2020 was the first time I can ever remember being asked questions about qualified business income; I was startled.

If I were to file amended 2018/2019 returns, I have no idea what I would change.

Re: QBI - why this year but not in 2019, 2018?

VolvoGirl — Tue, 06 Apr 2021 01:03:40 GMT

Don't know if this will apply but here are some notes I made in past years....

One thing I found was my QBI credit was not as much as I thought it would be. Because I had a business loss the prior year and it carried it over and took it into account.

This post must be about 2018 returns if my Jan 2019 was right.

Jan 5, 2019 User dmertz said

The developers revised the questions that are asked in regard to the Qualified Business Income Deduction. To reestablish your eligibility for the deduction you'll need to revisit the Business section, edit your business, click the Continue button on the Your [business name] Business page and answer the questions again. Be sure to answer Yes if TurboTax asks if you want to provide additional info that might be needed later.