I'm splitting up my Married Filing Jointly into two separate returns of Married, Filing Separately. But no matter how hard I try I cannot get rid of the QBI deduction on my return, that should only be on my spouse's return. (I started each separate return by making copies of the finished Joint return and then editing each individual return).
How do I do it?
The qualified business income (QBI) deduction is calculated based on business income which can come from sole proprietor income (Sch C) or S corporation or partnership or REIT income that is reported on a K-1 schedule. It can also be carried over from previous years if you reported business related losses in the previous year.
You would need business income in the current year to report a QBI deduction even if you had a loss carried over from the previous year. So, I suggest you look over the K-1 entries and also any small business entries on your return to determine where the QBI deduction is coming from.
If you have paid for your TurboTax product, you can view form 8995 Qualified Business Income Deduction Simplified Computation and that will show you where the QBI income is coming from. Once you find where it is coming from, you can update that section to remove or modify the QBI reported.
So ... even though I clicked on the delete button, it did NOT delete it. I'm starting my individual tax return all over again. This is dumb.
Did you save your joint return? Try the What If feature you have in desktop software.
WHAT IF…?
If you are using Desktop software:
If you were legally married at the end of 2021 your filing choices are married filing jointly or married filing separately.
Married Filing Jointly is usually better, even if one spouse had little or no income. When you file a joint return, you and your spouse will get the married filing jointly standard deduction of $25,100 (+$1350 for each spouse 65 or older) You are eligible for more credits including education credits, earned income credit, child and dependent care credit, and a larger income limit to receive the child tax credit.
If you choose to file married filing separately, both spouses have to file the same way—either you both itemize or you both use standard deduction. Your tax rate will be higher than on a joint return. Some of the special rules for filing separately include: you cannot get earned income credit, education credits, adoption credits, or deductions for student loan interest. A higher percent of your Social Security benefits may be taxable. Your limit for SALT (state and local taxes and sales tax) will be only $5000 per spouse. In many cases you will not be able to take the child and dependent care credit. The amount you can contribute to a retirement account will be affected. If you live in a community property state, you will be required to provide additional information regarding your spouse’s income. ( Community property states: AZ, CA, ID, LA, NV, NM, TX, WA, WI)
If you are using online TurboTax to prepare your returns, you will need to prepare two separate returns and pay twice.
https://ttlc.intuit.com/questions/1894449-married-filing-jointly-vs-married-filing-separately
https://ttlc.intuit.com/questions/1901162-married-filing-separately-in-community-property-states
Married filing separate works out much better for us.
As for the QBI, even when I start from scratch, it adds it & is the same amount as when I began with splitting up the joint return. I haven't added any business info at all. That's on my spouse's return.
We cannot see what you are doing---but I suspect the way you are just trying to "split up" the joint return and turn it into separate returns is flawed. You may be switching the names but you could be keeping the same income in the same spots in the software and are getting inaccurate results. Doing it correctly will take longer---but literally just prepare a return that is MFS for each spouse from scratch to compare to the joint return. You have that flexibility with desktop software.
I started a fresh return from scratch for myself, entered NO business stuff at all, and was still given a QBI deduction.
You have not told us what kind of income you are entering for just yourself, so we cannot guess why you keep getting QBI.
I did not enter any business income, loss or anything. I'm using Turbo Tax Personal & Biz ... so maybe that has something to do with it. It remains a mystery to me.
However----you still have not answered the question -----what kind of income did you enter?
None of those should be generating QBI or Schedule E. I think it is left over from whatever you were doing when you tried that switcheroo from MFS to MFJ. Have you tried using Forms mode and deleting the Schedule E?
No Schedule E is listed. When I try and delete the form using the Delete Form button at the bottom left of the 8995 form it does nothing. The form stays.
To call TurboTax customer support
https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number
Customer support is available from 5 a.m. to 9 p.m. Pacific time daily