Your QBI deduction will be calculated by TurboTax, based on the information you enter in the program.
After you enter your basic business information, you will be asked a few question to see if you qualify for the QBI deduction.
In general, the QBI deduction is 20% of your business's profit, but there are also adjustments for self-employed health insurance, certain retirement contributions and the deductible portion of self-employment tax.
If your total taxable income in 2021 is under $164,900 for single filers or $329,800 for joint filers, and your business is not a Specified Service Trade or Business (SSTB), the deduction is fairly straightforward.
If your income is higher, or is from a SSTB, your deduction will be limited, and it may be based on the amount of wages paid from your business.
Specified Service Trade or Business (SSTB) is:
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Health;
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Law;
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Accounting;
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Actuarial science;
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Performing arts;
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Consulting;
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Athletics;
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Financial services;
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Brokerage services;
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Investing and investment management;
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Trading or dealing in securities, partnership interests, commodities; or
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Any trade or business where the principal asset is the reputation or skill of one or more of its employees or owners.
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