Estimated taxes: QBI deduction

[schneider_101]

My business did not qualify for the QBI deduction in 2020 (income above threshold) but the estimated tax calculator is showing a large deduction for 2021 ($134K). Is this a bug in TurboTax?  Can I believe it?

[JamesG1]

The only way to confirm the calculations is by entering your information into your 2021 tax return in TurboTax.

Some things to check would be:

• Have you answered the QBI questions under the self-employment activity by scrolling down to Qualified Business Income and clicking on Start / Edit / Details?
• Does your business activity take place within the United States?
• Is any of your work activity work for a former employer?
• Is your self-employment activity a specified service trade or business (SSTB)?

See TurboTax Help here and here.

[schneider_101]

Thanks, James, for responding.  I will check in detail when I complete my 2021 return.

For the record, I do believe this was a Turbo Tax error, but only in the estimated tax calculation, not in the return filed.  

Our business does operate in the United States.  None of the work activity was for a former employer.  It is an SSTB, since it's an Optometry practice.  There is self employment income, but we did not qualify for the QBI deduction in 2020.  I don't expect to qualify in 2021 either.

I'll also look carefully at the calculation of 2022 estimated tax to see what it does.

Thank you.