Turbo tax is not calculating my QBI deduction and it should be doing that.

[JamesG1]

Perhaps all of the questions for the Qualified Business Income Deduction have not been answered?  Did you make these entries?

Under Here's your self-employment income info, scroll down to Qualified Business Income.  Click to the right.

At the screen How much of your work took place within the US?, click All or most of this work.

At the screen Was any of your work for a former employer?, click None.

See this TurboTax Help.

[TaxUser134]

Ok I think I found the problem on form 8995.

Form 8995

Field 10 qualified business income shows the correct amount. 20% of income for example 3,700

Field 11 taxable income before qualified business deduction. A very low number, example 300.

My question is Field 11. Is very low and I don't know why. It should be 20% of 3,700? Turbo tax instead is giving me only a QBI of 20% of Field 11. Not Field 10.

[TaxUser134]

James. Where can I find the screen you are talking about?

Please let me know what I have to click in the Turbo Tax program to get to this screen.

[DawnC]

You mentioned you are using the 2019 TurboTax Business software.   That software is only for corporations and multiple member LLCs and is only for use in preparing 2019 returns.   You have to use a 2020 product to complete a 2020 return - and you need Home & Business for a sole proprietorship.    The 2019 software will correctly calculate your QBI deduction, but the 2020 software is not yet up to date for the QBI deduction as the forms have not been all finalized yet.  

Using the 2019 Form 8995, your QBI is found on Line 15, which is the lesser amount of line 10 or 14.   The deduction is limited to the amount of Line 11 (less capital gains),  so if Line 11 is a low number, your QBI deduction will be low as it is 20% of that number.    You are describing a situation where your taxable income is lower than your qualified business income.   

The deduction is 20% of either taxable income (minus capital gains and dividends) or the QBI, whichever is less.  @TaxUser134

[Gill94]

Is it still the case that the turbotax 2020 software has not been updated to accommodate QBI? Although I answer all questions line 11 on 8995 is showing a value of 0. This is a pass through LLC but it seems like others are also having the same issue.

[SForrestLO]

These FAQs will provide more information. 

This Turbo Tax FAQ will provide information on qualifications.QBI Qualifications

Surprised that you're getting the Qualified Business Income (QBI) deduction? Here's what might be going on: QBI Guidelines

[joshgroce]

I'd like to confirm this as well. The 2019 QBI Deduction was not automatically calculated properly on our Premier 2019 Turbo Tax but it did automatically calculate properly on 2020. Be sure to follow the manual revision to this in the forms area as mentioned in order to actually get the QBI deduction to work in 2019.

[JamesG1]

What kind of income(s) do you have that would be generating a Qualified Business Income Deduction (QBID)?

The Qualified Business Income Deduction can be generated from one of two components. 

• The QBI component can result from a sole proprietorship, partnership, S corporation, trust or estate.  The first component would likely be reported on Schedule C, Schedule E, Schedule F or a K-1. 
• The REIT / PTP component can be generated from qualified real estate investment trust (REIT) dividends or qualified publicly traded partnership (PTP) income.  The second component could be reported on 1099-DIV or a K-1.

You may view the QBID calculations on IRS Forms 8995 or 8995-A to see how or if your calculations were made correctly.

You can review the 1040 in TurboTax Online by following these directions. 

• Down the left side of the screen, click on Tax Tools.
• Click on Tools.
• Under Other helpful links, click on View Tax Summary.
• Down the left side of the screen, click on Preview My 1040 to see the actual tax return that you prepared.
• Down the left side of the screen, click Back to return. 

You can print or view your full tax returns prior to filing after you have paid for the software.

See also this IRS Publication.

[mikemc75]

I had a large QBI deduction in 2019 and my 2020 return won't even calculate it.  My income is nearly the same, and according to IRS instructions I meet the criteria.  Tried opening the QBI worksheet and inputing data there, but it won't accept data.  TurboTax's site says "QBI is calculated automatically" - but it's not.  They also say the form will be released by IRS on 5 Feb and it's now Mar 22.  My desktop version says "no updates needed."

Can't get anybody to talk to me at TT.  This is the last year I buy TurboTax.  And I've been buying it for over 20 yrs.  

[SwampYankee]

You need to go into FORMS and manually select it in schedule C.  It's a small checkbox at the top.  Have you tried that?  Yes, the program gets worse every single year and less user intuitive.  It's not like the old days when they were actually helpful....

[mb93]

This worked! I was able to see the QBI deduction and how it was calculated by viewing the tax summary and going to "Preview My 1040".  I was able to see the Standard deduction 12,400 plus the QBI deduction which was 20% of total business income.

You can review the 1040 in TurboTax Online by following these directions. 

• Down the left side of the screen, click on Tax Tools.
• Click on Tools.
• Under Other helpful links, click on View Tax Summary.
• Down the left side of the screen, click on Preview My 1040 to see the actual tax return that you prepared.
• Down the left side of the screen, click Back to return. 

You can print or view your full tax returns prior to filing after you have paid for the software.

See also this IRS Publication.

[VFitzgerald]

I have an MLP investment that I received qualified dividends from and a K-1.  The MLP has negative income that should offset the dividends and result in no QBI deduction.  The net amount should be addd to my carry forward.  However, Turbo Tax is ignoring the negative income.  How do I fix this?

[GeorgeM777]

@VFitzgerald.  It may be correct as is.  As a way of background, both private limited partnerships and MLPs that are not taxed as a corporation are subject to the passive activity loss limitation rules.  Accordingly, on their personal income tax returns, the limited partners are able to deduct their share of partnership losses only if they have passive gains from another investment to match against them.  Investment income, such as interest or dividends from stocks or bonds, is not considered passive income, and losses from an MLP cannot be used to offset them.   Thus, it could that the reason your negative income (assuming the negative income represents a loss) is not offsetting your dividend income is because that loss, which is passive, can only be used to offset passive income from another MLP or other type investment that produces passive income.  

[VFitzgerald]

The current year passive losses are from the same MLP which should offset the current year dividend.  The loss is more than the dividend which should zero out the OBI deduction.  Then the loss should be added to prior year carry forwards.  This is not being calculated.

[ThomasM125]

@VFitzgerald Dividends are not considered Qualified Business Income, so your partnership loss would not be offset by them.