I am doing consulting work through a consulting company. I do not own the consulting company. I get paid and get a 1099 NEC tax form. I get to choose when I work and what studies I will work on. Do I get a Qualified Business Income Deduction. Turbo tax said I do not qualify. Why would I not get QBI Would QBI deduction reduce consulting income by 20% that I have to pay taxes on ??
TurboTax makes the determination as to whether your self-employment qualifies for the QBI deduction based on your answers to the questions in the Schedule C section. You can revisit Schedule C and go over the the questions that appear after the initial income and deduction entries.
A qualified trade or business is any section 162 trade or business, with three exceptions:
Please see this help article, this IRS FAQ page, and this IRS webpage for more information.
Depending on your income, the deduction may be limited if your activity is considered a Specified Service Trade or Business (SSTB). The specified service trade or business (SSTB) classification doesn’t come into play as long as total taxable income is under $191,950 ($383,900 if filing jointly). At higher income levels, the deduction for SSTBs is reduced and in some cases, eliminated.
You can also search for the QBI Flow Chart in the Instructions for Form 8995 and follow the steps to help determine whether the income qualifies for the Qualified Business Income Deduction.