topic When completing Turbotax, my Qualified Business Income deduction is quite low. I cannot see what is limiting it well below 20%. Anyone have any tricks? in Business & farm

When completing Turbotax, my Qualified Business Income deduction is quite low. I cannot see what is limiting it well below 20%. Anyone have any tricks?

myshlp1 — Mon, 23 Mar 2020 01:13:03 GMT

My overall income is below the threshold to reduce.
My Business Income is from an S-Corp.
The deduction calculated is not close to the 20% business income.
I do have taxable income overall and likely will owe money when filing return.

Re: When completing Turbotax, my Qualified Business Income deduction is quite low. I cannot see w...

JohnW222 — Mon, 23 Mar 2020 16:46:30 GMT

There could be a number of reasons that the calculation doesn't give you the deduction that you thought it might.

Please see How is the deduction calculated? in the TurboTax Help article "What is the Qualified Business Income (QBI) deduction?" for possible explanations.

Re: When completing Turbotax, my Qualified Business Income deduction is quite low. I cannot see w...

myshlp1 — Wed, 25 Mar 2020 20:42:12 GMT

Thank you so much for the insight.

The item I am struggling with is somewhere inside this article ...

1 - Filing jointly with taxable income well below $315,000 threshold at which QBI deductions based on net income comes into play.

2 - I am in a business that DOES QUALIFY for QBI.

When it says at incomes below that level, the deduction is 20% of either taxable income (minus capital gains and dividends) or the QBI, whichever is less.

I did come across a few interesting things that may help others.

https://taxschool.illinois.edu/qbi.html

https://bradfordtaxinstitute.com/Tools/199A-Calculator/

I want to ask pointed questions but I have answered most of those thanks to your help, independent research, and playing with some calculation tools.

Nothing is illuminating why the QBI is calculating so low in Turbotax for me

Maybe I will try running my Tax Analysis with another software to see if it is, in the end, a Turbotax bug.

Thank you.

Re: When completing Turbotax, my Qualified Business Income deduction is quite low. I cannot see w...

VolvoGirl — Wed, 25 Mar 2020 20:44:43 GMT

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.