Qualified Business Income Deduction

[UA2]

We have two separate self employed business. (One is a single member LLC.) Both should be as qualified business income and checked as such in the questions.  When I look at Form 8995, QBI Deduction Simplified Computation, line 1(c) Qualified business income shows the amount only for one business. It shows zero in another business column.

Please advise how to fix this.  

[Mike9241]

please clarify. if one is a single-member LLC what is the other and what is its business?

[UA2]

The SMLLC's business/service is athletic instruction (coaching) and another is a self employed business with bookkeeping. The bookkeeping business is able to take a deduction. But, not for single member LLC business. Form 8995  Line 1 (c) qualified business income shows $0 amount for the SMLLC even I answered "yes" for the question.  

Thank you.

[VolvoGirl]

Do you have a Net Profit on that Schedule C?  

[UA2]

Yes, the both business have net profit. The total income on 1040 is less than $130K. I'm wondering if I should  delete one business and retry to enter data again to fix this problem.  Thank you.

[Mike9241 · Accepted solution]

coaching appears to be a Specified Service Trade or Business which depending on your taxable income the QBI could be zero. 

***********************************************

there is a question for the SMLLC  as reported on schedule C  - is this a qualified trade or business under 199A - you need to answer yes and later check the box SSTB

********************************

the computation of the QBI deduction for each schedule C is a little complicated.  first there is the Schedule C net income

then that must be reduced by the following

1/2 the SE tax

self-employed health insurance

retirement plan contribution

possibly other expenses 

*************************************

if you can view the forms - all calculation worksheets there should be a QBI Component worksheet for each

*******************

since we can't see your return if the issue isn't resolved then contact support which you can allow to review your return to determine what the issue is. 

[UA2]

Found out by reviewing "QBI Deduction Smart Worksheet" in the Form Sch - C that Sch C profit is reduced to zero after S. E. deduction. As such, this business can't take QBI deduction. 

Thank you all for your help.

[Mike9241]

something is wrong   if you had only $500 of net schedule C income the SE tax is a maximum of 500*.9235*.153 = $70 of which only 1/2 reduces the Schedule C income for QBI. net income would be $430 not zero. if the SE tax is reducing the income to zero you may be doing something wrong. 

[UA2]

Thanks for your reply. SE deductions include SE health insurance and 1/2 SE tax.