My notes say
(1) the 1/2 SE tax deduction,
(2) Self Employed Health Insurance deduction, and
(3) employer retirement contributions
need to be subtracted from your business profit to determine "Qualified Business Income" (QBI) for the 20% deduction.
But 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.
What is the 20% QBI Deduction and how it's calculated
VolvoGirl,
Thanks for responding to my question and advising me that the 1/2 SE tax deduction must be subtracted from my business profit. I didn't know it. Thanks for a brief and clear explanation.
ajk2010foros
it's not a credit it's a deduction - credit saves you $ for $ deduction saves a max of about 40% federal there is also a 4th category, for partherships, and the like partners may deduct certain expenses against the partnership results , these to would need to be subtracted in fiquiring QBI.
also say there are 3 trades or businesss 1 and 2 - $20,000 profit each 3 - $10,000 loss the loss must be allocated to the profitable ones so each of 1 and 2 would only show a $15,00o of QBI and it gets even more complicated if any are a specified service trade or business.