I have read A LOT of information about the QBI deduction, and it appears that TT is not calculating correctly. I have QBI income, and my taxable income is way less than the $329,800 mfj amount . I should not have to do the "apply W-2 wages and qualified property limitation" step, correct? I am quoting directly from a source "If your taxable income is less than these amounts, you don't have to take the limitation. You can take the straight 20% deduction." Am I misunderstanding something?
"If your taxable income is less than these amounts, you don't have to take the limitation. You can take the straight 20% deduction." Am I misunderstanding something? Yes, you are. the above is only the tentative QBI deduction and even then certain adjustments have to be made to QBI income before this tentative amount is computed.
a=tenative QBI deduction of 20% of the sum of QBI business net income (see below for adjustments) + qualified REIT dividends + Publicly Traded Partnership income (I'm assuming the QBI is not from a specified service, trade or business)
b= taxable income
c= net long-term capital gains and qualified dividends
d = qualified coop dividends
e= b - c -d
f = 20% of e
g= 20% of qualified coop dividends
h = lesser of e or g
i = actual qbi deduction = lesser of a or f+h
qbi income adjustments: qbi business income is reduced by the following items:
1/2 SE tax attributable to the QBI
Self-employed health insurance attributable to the QBI
Qualified retirement plan deduction attributable to the QBI
other deductions reducing AGI attributable to the QBI
to see Turbotaxes computations look at form 8995 or 8995A