form 8995

Forum|Forum|2 years ago
February 28, 2024
1 reply
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Line 1.i on Form 8995 shows my self-employment income as a number which is less than the income shown on Schedule 1 line 10 so I am not getting as much of a qualified income business deduction (20% deduction) as I had planned on. Why would the amounts be different?

Ask the Experts - SelfEmployed - Feb 2024

DawnC

Level 15

Schedule 1, Line 10 shows a total of all of your other income. Look on Line 3 of Schedule 1 to see the amount of business income reported. That should match what is on Form 8995 - QBI deduction.

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g2consultingAuthor

Level 2

Schedule 1 Line 3 and Schedule 1 line 10 both show the same amount. The amount shown on Form 8995 Line 1.i. is approximately $13,000 less. Should they be the same amount? Why would it be lower?

RobertB4444

Level 15

Here's the skinny from the IRS-

QBI Component. This component of the deduction equals 20 percent of QBI from a domestic business operated as a sole proprietorship or through a partnership, S corporation, trust, or estate. The QBI Component is subject to limitations, depending on the taxpayer's taxable income which may include the type of trade or business, the amount of W-2 wages paid by the qualified trade or business, and the unadjusted basis immediately after acquisition (UBIA) of qualified property held by the trade or business. It may also be reduced by the patron reduction if the taxpayer is a patron of an agricultural or horticultural cooperative.

There are a number of things that can effect what portion of your income is qualified. Your total business income often is not.

@g2consulting

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