Yes. You do not need to be concerned about entering the information on Form 8995-A or Form 8995 yourself because TurboTax will do that for you automatically. Self employment automatically qualifies for the qualified business income deduction (QBID).
Check to see if your business is considered as a specified service trade or business (SSTB) which limits the deduction depending on the income
If your income is above the threshold for 2024 there is no deduction for the qualified business income deduction (QBID) and only losses are eligible for carryover.
Your QBI for each of your trades or businesses may be partially or fully reduced to the greater of 50% of W-2 wages paid by the qualified trade or business, or 25% of W-2 wages plus 2.5% of the UBIA of qualified property from the qualified trade or business.
The partial or full reduction to QBI is determined by your taxable income. If your taxable income (before the QBI deduction) is:
• At or below the threshold, you don’t need to reduce your QBI;
•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.
For the purposes of the QBI deduction, an SSTB is defined as any trade or business that performs services in the fields of:
- Accounting
- Actuarial science
- Athletics
- Consulting
- Health
- Law
- Performing arts
- Financial services
- Brokerage services (including investment management and investing, trading, or dealing in securities, commodities, or partnership interests)
Engineering and architecture were specifically excluded from the SSTB definition as it relates to this new deduction.
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