TT created Form 8995 for no reason!!

[deanadk]

TT created form 8995 on my son's taxes.  He is a college student who's only income is from a summer internship.  Why on earth is TT doing this!  And how do I get rid of it??

[Spino]

https://www.irs.gov/forms-pubs/about-form-8995 

If the internship paid him as a contractor, rather than an employee, then he may be eligible for this business deduction. If he actively managed rental real estate, he might also qualify, but then you probably wouldn't be filling out his taxes for him!

Did he get form 1099-NEC from the internship or have other small business/contracting income (like a photography business or a lawncare business, etc.)?

[deanadk]

Thank you for getting back to me!  He only received a W2, no other forms.  And he definitely did not manage any real estate. 😂. His only income was from the 12 week internship which was below $35,000.

[deanadk]

I think I figured out the problem.  He had a $3 dividend reported in box 5 which triggered the 8995.  TT did a very poor job of explaining this.  In fact they didn't explain it at all.  Another customer figured it out when they had the same problem.   I had to remove the dividend. What if the dividend had been higher?  I would have no choice but to report it, but I wouldn't be able to delete the form 8995.   I think I'm done with TT. I have problems with them every single year.  But I thank you for responding and trying to help!!

[Spino]

It's likely then that you may have filled out the wrong kind of 1099.

A 1099-DIV will not trigger the qualified business deduction.

It's a bit confusing, but almost any non-wage income from a business triggers some kind of 1099, and depending on the kind of income it needs to go different places in the return. 1099-INT for interest and 1099-DIV for dividends go to schedule B, while 1099-B for capital gains goes to Schedule D and 1099-G is for certain government payments and 1099-R is for pensions and IRA withdrawals. 1099-misc is a category, but now 1099-NEC is specifically for non-employee earned compensation.