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I have the deluxe edition on a Mac. The new qualified business income deduction does not appear to be working. Please explain.

We (married couple) have about $380k of taxable income, most of it W-2 income from our employers.  We also have a small amount (about $7k) of consulting income on a Schedule C. We have minimal capital gains. We should get a qualified business income deduction of about 20% of the $7k, albeit then partially phased out because we are between $315k and $415k of taxable income, but yet line 9 (where this deduction appears) of the 1040 shows nothing. When I go to the forms and click on that line 9 in the form 1040, it just shows a blank worksheet, and Turbo tax usually has worksheets for everything.  It appears as though the qualified business income deduction (and that worksheet) is not working right, or is somehow not activated. Is Turbo Tax not up-to-date on this?

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Accepted Solutions
TerryA
Intuit Alumni

I have the deluxe edition on a Mac. The new qualified business income deduction does not appear to be working. Please explain.

On your Schedule C you have to link it to a QBI Component Wks. Open the Schedule C in Forms Mode (Step-by-Step takes you there too) and scroll down to the bottom QBI Deduction Info section. Be sure that line A is checked Yes and that line K is linked to a QBI Wks. You should see allowable QBI in line H1.

You can then open the QBI Summary to see how the deduction is being computed. You may also have the QBI Simplified Wks going on as well.

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2 Replies
TerryA
Intuit Alumni

I have the deluxe edition on a Mac. The new qualified business income deduction does not appear to be working. Please explain.

On your Schedule C you have to link it to a QBI Component Wks. Open the Schedule C in Forms Mode (Step-by-Step takes you there too) and scroll down to the bottom QBI Deduction Info section. Be sure that line A is checked Yes and that line K is linked to a QBI Wks. You should see allowable QBI in line H1.

You can then open the QBI Summary to see how the deduction is being computed. You may also have the QBI Simplified Wks going on as well.

I have the deluxe edition on a Mac. The new qualified business income deduction does not appear to be working. Please explain.

This answer from TurboTax Terry was perfect -- THANK YOU!!  I linked the worksheet and it all works fine.  
One interesting thing that I now see (now that I have this working) is that the phase-out reduction gets applied to BOTH the dollar amount of QBI AND to the percentage applied to it -- sort of a double hit in the phase out.  So, say you had $10,000 of QBI to start and say the phase our percentage is 75%. In this example, the QBI gets reduced to $2,500 AND the percentage applied to it is only 5% (which is the full 20% reduced by 75% of 20%, or 15% less), so you only get 5% of $2,500, which is a QBI deduction of only $125 (rather small).
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