QBI deduction (phased in reduction)
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
daveterri81
New Member

QBI deduction (phased in reduction)

I have QBI that is from an SSTB and my income is within (but not greater than) the phase-out range.  I understand that a portion of my QBI will be reduced, however the Turbo tax software seems to be reducing it twice.  It is first reduced on rows 5 through 11 of the Form 8995A Schedule A Smart Worksheet.  This reduced amount carries to Line 2 of Form 8995-A, where it is subsequently reduced again in Part III of that form.  This does not seem right to me.  I may have input something wrong but I can't figure out where.  Has anyone else seen this?  Is it correct?  Any suggestions?

3 Replies
DaveF1006
Employee Tax Expert

QBI deduction (phased in reduction)

It depends.  I assume this is reported from a K-1. Can you clarify this by telling me if:

  1. If this a K-1 from an S-Corp or partnership?
  2. The amounts listed in each box of the K-1.
  3. Once I have this information, I will test this in my software to see if I get the same results as you.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
daveterri81
New Member

QBI deduction (phased in reduction)

Yes, there is a K-1 involved.  It is for a partnership.  The amounts on the K-1 are:

Row 1:  19,356

Row 14a:  19,356

Row 14c:  30,371

Row 19a:  19,237

Row 20, Code Z:  

   Ordinary income  19,356

   Self-employment income  19,356

(The SSTB box is also checked yes on row 20)

 

The K-1 is the biggest part of my QBI, but I also have $8,279 of Schedule C income which is eligible QBI and is a SSTB.  Both the K-1 income and the Schedule C income are getting the same calculation of QBI.  I am attaching pictures of the Form 8995-A and the 8995A Schedule A smart worksheet from turbo tax.  Thanks so much for your help on this.

Dave

Form 8995-A, Page 1.jpgForm 8995-A, Page 2.jpgSchedule A Smart worksheet.jpg

 

 

ThomasM125
Employee Tax Expert

QBI deduction (phased in reduction)

There is a phase-out of the deduction based on your income under normal QBI rules, then there is an additional phase-out if you are a SSTB, that is why it appears you are being hit twice with phase-outs.

 

You may find this article helpful:

 

What is the Qualified Business Income (QBI) deduct... (intuit.com)

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Dynamic AdsDynamic Ads
v
Privacy Settings