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wrwbear
New Member

Why is my QBI deduction so low compared to 20% of my business net income?

The QBI calculated by TT is only $236.  Yet, my total taxable income (MFJ) is $100,534 and my schedule C business net income is $10,372.  Reviewing the QBI Form 8995 worksheet from IRS, I would seem to qualify for 20% of the $10,372, give or take other minor subtractions from net income.  So, I think QBI deduction should be around $2,000 not $236.

 

All of my gross income is coming from a Form 1099-NEC.  Should my customer have used 1099-MISC instead?  Perhaps that might be the problem?

 

Thanks.

2 Replies
ColeenD3
Employee Tax Expert

Why is my QBI deduction so low compared to 20% of my business net income?

No, your income was correctly reported on Form 1099-NEC.

 

 The 20% QBI deduction calculation compares the difference between 20% of the QBI (your Schedule C net income, minus any other deductions attributable to your Schedule C income, which encompasses deductions such as the solo 401K deduction, Self-Employed Health Insurance Deduction attributable to the business, and 1/2 of SE tax being deducted on your return) and 20% of your taxable income.

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wrwbear
New Member

Why is my QBI deduction so low compared to 20% of my business net income?

Thanks.  I think I see it now.  I was going by the Schedule C net income and didn't understand that this figure would be further reduced by the self-employed health insurance deduction, which really shows up on another line in the 1040.

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