TT Does not seem to be calculating my QBI deduction

[rggoulet2]

my gross 1099 Misc. is $73,796 and I have $17,137 in itemized business expenses, resulting in a TT calculated "net" business income of $56872 (I'm assuming math is slightly off due to some expense category not being fully deductible--e.g. 50% meals).  

When I click on the QBI Deduction it takes me through two questions, but doesn't tell me anything in terms of calculating the QBI.  After reading other answers posted I clicked through the "wrap up" expenses, income, deductions, etc. and TT then says congratulations you qualify for a QBI deduction of $10,571.

Unless I am misunderstanding the deduction, I thought it was a deduction of 20% of net income (meaning it is calculated after other qualified expenses) so should result in an additional reduction of taxable income by  $10571 (the QBI Deduction) taken from $56872 (the net business income TT is showing as my net business income after itemized expenses but before QBI deduction)?  

Is the QBI deduction like a standard deduction that is in lieu of itemized expenses and not in addition to the itemized expenses?  Or should my taxable income be reduced by the QBI deduction in addition to itemized deductions? and if that is the case why is TT not calculating the additional reduction?!  thanks to anyone who can help!

[JulieCo · Accepted solution]

The QBI deduction is a deduction related to taxable income.  It is reported on line 9 of the 1040 form.  The deduction is in addition to the standard/itemized deduction and is not affected by the standard deduction or itemized expenses reported on your return.

Below is the definition per the IRS of the Qualified Business Income for the calculation:

Your qualified business income includes items of income, gain, deduction, and loss from your trades or businesses that are effectively connected with the conduct of a trade or business within the Unites States. This includes income from partnerships (other than PTPs), S corporations, sole proprietorships, and certain trusts that are included or allowed in determining your taxable income for the year. It also includes other deductions attributable to the trade or business including, but not limited to, deductible tax on self-employment income, self-employed health insurance, and contributions to qualified retirement plans.

Therefore, the missing piece in your calculation is probably the income being lowered for the self-employment tax.  There is a QBI worksheet that is included with your return that would show the calculation of the deduction.  You can preview your tax return before filing using the steps below:

https://ttlc.intuit.com/replies/3302322

Plus, see more information on the QBI deduction below:

https://ttlc.intuit.com/replies/7019998

[rggoulet2]

Thanks so much your answer was very helpful!