Turbotax applied entire QBI deduction for LLC to me. What did I enter incorrectly?

[MOtaxM]

We received a K-1 for my husband's LLC, in which he is one of several members.  I filled in all the boxes as asked for by TT from the K-1, and filed the return.  When I looked more carefully at the printed return, I saw that it appears the entire income from the LLC is being used to calculate our qualified business income deduction- not just my husband's portion of the income. (but his income from the LLC is being properly reported)  So,

1. What could I have answered incorrectly in the questions?  I don't think TT ever asked what % ownership my husband has.   I don't even know how I would amend this, since I just answered the questions asked.  

2. How long do I have to wait to amend the return?  Do I have to wait until I get my (too big) refund, (ie until I know the first return has been processed?), or can I do it immediately?  

Thanks!

[KrisD15]

You need to wait until the original is processed. 

If this is a mathematical error, the IRS may correct it without you needing to amend. 

If you think you will owe, and April 18th is near, make a tax payment.  Be sure to indicate that it is for tax year 2021 and include your Social Security Number. 

Could you share your portion of the business income and the amount on your 1040 line 13?

[MOtaxM]

Thank you for your response.  I guess I'll have to wait.  (I do not want to share numbers here.).

Any idea why tt would attribute the entire deduction to us?  

[KrisD15 · Accepted solution]

There should have been a statement included with the K1.

Below is a link to explain:

TurboTax link on QBI for Partnerships

[MOtaxM]

Yes, there was.  Now I'm wondering if I entered the statement data from the 1065-instead of our K-1.  

Can one simply reopen the desktop version of turbotax after filing,  and go back through the questions to see what was entered?  Or do you have to request to amend first?  

[ThomasM125]

You can simply open the return in desktop TurboTax without doing an amendment. What may have happened is that you entered the QBI income separately in box 20, code Z when you entered your K-1 schedule. In box 20, you are requested to enter the QBI income from the partnership, you may have entered the total income, not just your share.  

[MOtaxM]

I'll go take a look.  Thank you!

[MOtaxM]

This is what I did.  Hopefully, I will get some response from IRS soon, so I can amend.  Thank you, both!

[Mike9241]

we can't see the k-1 but the amount on 20Z for the QBI amount should be the same as the business income  (lines 1 or 2).   20Z or 20Z1 actually goes nowhere. there should be a question later on about QBI. where you enter the QBI amount reported on 20Z

if the two amounts don't match then it's not you, the k-1 and hence every member's k-1 was prepared incorrectly. in this case the preparer of the partnership return needs to amend the return so the k-1's reflect the correct amounts and then you can file amended personal return.

[MOtaxM]

Hi Mike,

The K-1 is correct.  Somehow I entered the information from the Statement attached to the 1065 (for whole LLC)-instead of from my K-1.  The fact that I made this mistake is very upsetting to me.  I just want to correct it now! 

When i did a search online, I found advice from the taxpayer advocate service at the IRS that says that if you don't receive a notice from the IRS:"If the due date for filing your tax return has passed, you can submit an amended tax return to correct most mistakes. You can’t electronically file an amended tax return. You must mail it to the IRS. If you realize you made a mistake but the due date for filing hasn’t passed, don’t file an amended tax return. Instead, file another original tax return with your correct information."   This seems incorrect on several counts.  How can I just send another original?  It would get rejected if sent electronically, and would sit long after the tax deadline if sent on paper.

  I also read about superseding tax returns.  (maybe that it what is being referred to above) But, that must be sent by mail, and I imagine would sit around for many months.  

What is the quickest option to fix this-without causing further confusion?  We are still due a refund, but only half as much as on the original return.  And can I send an amended return before the tax deadline?

[ThomasM125]

You can send an amended return before the due date of your return for the current tax filing year. However, it may delay the processing of it if you file it before your current year return is processed. So, you should wait until you receive your refund from the current year before you submit the amended return.

[MOtaxM]

Thanks.  I guess the waiting begins....