QBI Deduction not calculating

[impala1995ss]

Hello,

On my personal return, I have rental income on Sch E and it's not calculating the QBI deduction even after selecting "yes" to the question.   Line 10 on my 1040 is blank.   I looked at the Turbo Tax Smart Worksheet for Sch E (see attached pic) and the box where it would qualify for safe harbor is not checked.   How do I check that box?  I presume this is the reason it's not calculating the QBI deduction.   I'm well under the income threshold for 2019. 

Other items on my return include the following (if it makes a difference):

• Small W2 income (unrelated to sch E)
• 401k Rollover (tax free)
• Roth IRA conversion (taxable)
• Sch D Capital loss
• Sch A expenses
• Dividends

Help!

[DavidS127 · Accepted solution]

Try to go back through the Step-by-Step interview for each Schedule E, and you will see a screen requesting Business name and EIN enter the name you are using for the rental property in the box for Business name. You don't need to enter anything in the EIN box.

You can do this in TurboTax Download/CD in Forms mode on the QBI Component form for each Schedule E by entering the name you are using for the rental property in the first box, "aggregate trade or business name".

[impala1995ss]

That worked, thank you!  I knew it had to be simple.   I called support TWICE and they were clueless.

[TaxMan47]

I'm having this same problem but for a Schedule-K.

[impala1995ss]

Hello, while researching my issue, I came across this post that might have the answer to your K-1 problem.  It's a couple pages long but may be worth the read.

https://ttlc.intuit.com/community/taxes/discussion/qbi-not-calculating/01/1009926

[DavidS127]

When you enter a Schedule K-1 form you received from a business with QBI, make sure you have entered all the information on the Statement or STMT that came with the K-1 you received.  That Statement or STMT will be associated with box 17 code V, and should be designated as "Section 199A" information.

To enter your box 17 code V information properly, Continue through the K-1 interview after you have entered your code V for box 17.  You don't actually have to enter an amount on that box 17 screen, it doesn't "feed" any calculation. There is a screen near the end of the interview titled "We need some more information about your 199A income or loss".  This screen must be completed in order for your box 17 code V information to be correctly input into TurboTax.

Here is a screenshot of the screen you are looking for:

 And, depending on what is reported on your K-1 statement, you may need the next screen as well:

To get back to the K-1 summary screen and find the Schedule K-1 to edit, click the "magnifying glass Search" icon on the top row, enter "k-1" in the search window and press return or enter, and then click on the "Jump to k-1" link to find the K-1 you need to edit.

@TaxMan47

[SwampYankee]

The software will not do it automatically and does not work. You need to go to the forms page for schedule C and click on the box that you are qualified for the QBI. Do not listen to ANYONE who says it does it automatically. It has not since the 20% was instituted. Are these people working for the IRS and trying to get you to overpay?

[jtkbau]

I have a sole proprietorship in a service business. My profit this year is very small ($5000). The program is not calculating the QBI deduction, although it always has in years past. Is it because the profit is so low?

[DawnC]

No, you can get QBI as long as you have a profitable business.   The deduction amount depends on your total taxable income, which includes wages, interest, capital gains (etc.) in addition to income generated by the business.    How much is your taxable income; it is on line 15 of Form 1040.   

If your taxable income is less than $191,950 ($383,900 if filing jointly) - the deduction is  20%  of  QBI or taxable income minus capital gains and dividends (whichever is less) to come up with the deduction.   So, if you don't have taxable income, you won't get the deduction.

Did you already go through the interview screens and answer the QBI questions?  If not, go back to the Schedule C interview.   After you enter your income and expenses, click on Continue - - and the QBI questions appear.   @jtkbau 

[jtkbau]

Taxable is $213,585 (filing jointly). Yes I have gone through the business interview screens again and answered yes to the qbi questions.  The deduction still does not show in the summaries.

[SwampYankee]

Leave Easy Edit and go into the actual forms.  You should be able to manually check off the QBI deduction on the form.  If it is already checked, you should be getting the deduction.  I have not downloaded their next version of nightmare software so I am not sure if this is a repeating problem from previous years.

[DaveF1006]

To look at this in detail and to report a possible product defect, we would like to see a diagnostic copy of your return. The information in this file is a sanitized copy meaning there is no personal information, only numbers so that we can troubleshoot in depth, check for calculation issues, and to see how certain items are applied. Here is how to order. 

For Turbo Tax online, go to tax tools>tools>share my file with agent.  When this is selected, you will receive a token number.  Respond back in this thread and tell us what that token number is. 

If you use the desktop version, go to the black stripe at the top of the program, click on online, and then select send tax file to agent. Let us know what the token number is.

[jtkbau]

93258291-73656262

[DaveF1006]

I reviewed your file and I discovered why you weren't receiving a QBI deduction. 

1.  Your net income for the business was $5955, which is reported on line 10 of your Schedule 1.
2. Your health insurance premiums for the year are not reported as expenses as part of the $5955 calculation.  They are accounted for separately on line 17 of Schedule 1.
3. Additionally, $421 is reported on Line 15 of Schedule 1, which is the deductible part of self-employment tax. 
4. Even though the health insurance premiums and the deductible part of self employment tax are accounted for separately, they are still considered part of the calculation of QBI.

Now your qualified income  for QBI considerations is.

                                           Income for the year                        $5995

                                           Minus Health Premiums               -  5534

                                           Deductible SE Tax                       -     421

                                                                                                         0            

You had no taxable income for the year to claim QBI.  To test to see if the program worked correctly, I removed one of the health insurance premiums entries you paid during the year and when i did that, a small amount of QBI appeared in your return on Line 13 of the 1040.   

@jtkbau