Qualified Business Income Deduction

[KGJ]

Last year I used TurboTax Deluxe 2018. It correctly calculated and applied a Qualified Business Income Deduction from a Schedule K-1.  When doing my taxes with TurboTax Deluxe it does not calculate the deduction and the Section 199A Deduction worksheets seems to be missing. I searched the programs Help for "Qualified Business Income Deduction." It brought up instructions but the program does not offer the listed options.  Will a future update provide the function/forms or has it been removed form TurboTax Deluxe?

[AmyC]

The QBI form is currently expected to be released on Feb 5, 2020. Once it is released, Turbo Tax will work quickly to get it into the program.  You can check the form 8995 listed near the bottom for updates at this link.

Once incorporated, TurboTax Deluxe will calculate the qualified business income deduction (QBI) from your K-1 entries.

If you are reporting income from a partnership K-1 schedule (form 1065), then you would need an entry in box 20 with code A, AA, AB, AC or AD of the K-1 schedule to qualify for a QBI deduction. If you are reporting income from an S corporation (form 1120-S), then you would need an entry in box 17 coded "V".  It is possible that the income reported to you does not qualify for a QBI deduction.

[ericinmaryland]

I am not sure I understand why there is a delay.

QBI is not new and is calculated the same as always. Your form site indicates the simplified version is supposed to be available but it does not work in the product. February is very late for those who are trying to prepare returns earlier to confirm expectations. This goes for Business and Personal products.

You already prevent filing when forms are not ready so why don't you implement everything in Turbotax and use 2018 coding/approaches when you are not sure about 2019? That would be a big help to users and I can't see much of a downside for Intuit.

Here's a great example: Section 179 did not work in the Business product until a couple of days ago. Depreciation was set it stone in August of 2019 by the IRS so why the huge delay.

[ericinmaryland]

Also your forms availability says its suppose to be ready to go by 2/5/2020....not pending your inclusion in the product. 

[ThomasM125]

I am sorry the form is not available yet. Normally, this is due to a delay in finalizing the tax law for the current year, which is often done by congress after the close of the prior year.

[jjeffm]

On my current K-1 from my TurboTax Business 1065 Form Box 20 shows A with an amount and Z with *STMT.  Last year my Box 20 had A, Z, AA, AB.  Is there something different I need to do this year or is there also going to be a correction for the K-1 when 2019 Form 1065 is completed?  (Date?)

Thank you for the QBI information!

[DaveF1006]

There is nothing new you need to do except complete your 1065. Last year there were more codes to enter.  iI sounds like you are still working on your 1065 and there may be additional codes that generate in Box 20 once that form is complete.  It doesn't sound like your K1 is final if you haven't completed your 1065 yet.

[jjeffm]

My 1065 generated from Turbo Tax Business 2019 is complete and there are no errors on the error check and no red "!" when I use the View/Forms. 

The only thing I can think of is that "*STMT" means: "Statement A-QBI Pass Through Entity Reporting" that is part of the 1065 K-1.   On Statement A the Ordinary Business Income, W-2 Wages and UBIA of qualified property section of this statement have the amounts (no letter codes) that were on  the K-1 for 2018 with the letter codes.   

I don't understand why change to *STMT on the K-1 for 2019.  Now I have to input things manually?  And if this was the first year of using Turbo Tax there isn't any guidance for which letter codes I'm suppose to use - although I can go by last my 2018 filing. 

You would think that Turbo Tax would have an import feature on the Personal Tax software that could just import any necessary information from the Business  Tax Software.  Just a thought.

[MaryK4]

Unfortunately, the supplemental information on the K-1 is not in a specific format so it is not always possible to format for imports- but I agree with you it would make tax prep much easier with fewer errors.

@jjeffm

[bobbie-]

Now it's saying the QBI form won't be released until 2/12/20. I need to get my taxes filed ASAP as I need them for other matters. I don't understand why this form is not ready, you say forms are often not ready because the government doesn't finalize the law until after the beginning of this year. The laws regarding QBI were set before 1/1/20.

I have been using TT for over 20 years, the past few I have become more and more frustrated with TT not having all of the forms and information ready and coming up with clearly invalid excuses as to why.

[LindaB1993]

Although, electronic filing is delayed until 02/12/2020, for finalization of the QBI calculation, you may save and print the 2019 return. 

This can be done for your records and other matters that you need your tax return for.

[jjeffm]

So why does Form 1065 K-1 have *STMT in Box 20 for 2019 when for 2018 it had the correct amounts with letter codes?  Why is the TT user left to figure that out for 2019 but did not have to figure this out for 2018 as it was done by TT?

@MaryK4

[bobbie-]

Yes, but it is incomplete because my income will be less after the QBI calculation.

[ericinmaryland]

@LindaB1993 Thats not a solution since I cannot update the 1040 either. Suggesting I print is a non-productive comment.

I see Intuit has now slipped the date to 2/12, and I have some questions:

1) Is the calculation different from 2018?

2) If different, was the new approach not known until 2020?

2) Why weren't you ready to complete this work in 1 day?

3) I see plenty of posts where even in June 2018 people were still complaining about this calculation. Not sure I understand this delay. Posts here seem to suggest that one has to enter things in a specific way in TT . Not sure I follow that either. Can you clarify.

[ericinmaryland]

@jjeffm That could very well be a bug as I also dont see entries on my 1120s. Suffice to say, filing is probably not a good idea until March. In the past I have opened TT months after filing to find an update. My numbers dont change but that does not mean the forms are correct.

For me, I am simply anxious as this is my first year filing for business and I want to know if my estimated payments were sufficient.