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Returning Member
posted Jan 5, 2022 8:25:10 AM

Is consulting activity a qualified business income (QBI

I want to make sure that income from my wife’s consulting activity is qualified business income (QBI).  She will be receiving income from her consulting while working from home in South Dakota.  The income received is not from wages as she is an independent consultant.  She has entered into a consulting contract with one company and income received will be reported as self-employment income on Schedule C.  Her consulting activity has been continuous since started in 09/2021.  She has profited from this.

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2 Replies
Expert Alumni
Jan 5, 2022 8:52:10 AM

It depends. Consulting is specifically excluded from the deduction if taxable income is greater than the threshold amount.  For 2021 the threshold is:

  • Married Filing Joint- $329,800 with a prorated deduction for income up to $429,800
  • Married Filing Separate-$164,925 with a prorated deduction for income up to $214,925

If your taxable income is below the threshold then, yes, she would qualify for the full deduction. 

Level 15
Jan 5, 2022 8:56:44 AM

 Q.Is consulting activity a qualified business income (QBI)?

A. Yes.  For exceptions, see https://proconnect.intuit.com/taxprocenter/tax-law-and-news/professional-services-guidance-for-the-qbi-deduction-helps-define-specified-services/

 

References:  

https://www.forbes.com/sites/kellyphillipserb/2017/12/22/what-tax-reform-means-for-small-businesses-pass-through-entities/#445a16146de3

https://www.nerdwallet.com/article/taxes/qualified-business-income-deduction