Turbotax Business (for Trust) not allowing QBI deduction

[randy5419]

I’m doing a Trust tax return using Turbotax business.   The Trust has Section 199A dividends that should result in a deduction equal to 20 percent of the dividends, and a filled Form 8995.  But that is not the case.  I tried entering the deduction manually to see if Form 8995 would appear.   What happens is I get a warning saying “QBI deduction on Form 1041 does not equal the amount computed on the QBI Deduction Summary Worksheet.”  But in forms view, there is no “QBI Deduction Summary Worksheet.”  Screen shots of the warning and my forms list are below.

Any help would be much appreciated. 

[Anonymous_]

I cannot seem to reproduce this on a test return (1041).

You might have to contact Support tomorrow.

What is the TurboTax phone number? (intuit.com)

[randy5419]

Tagtem, thanks for taking an interest.

I talked to two people at Turbotax Support, the second being a “product expert.”  She had not seen the problem before, and could not find a solution, other than to show me how to add form 8995 to my forms list so I can manually modify the return to properly reflect the QBI deduction.

You say you could not duplicate my problem.  I take that to mean that on your test return, a form 8995 was generated and filled correctly.  Is that so? Are you using a windows computer? 

I also did a stripped down very simple test return that included only a 1099-Div with Section 199A dividends.  Does that describe your test return?  My test return had the same problem.

Thanks.

[Anonymous_]

Yes, I am using a Windows computer and the 8995 was generated.

Of course I did not actually e-file the return but I also did not receive any flags.

[randy5419 · Accepted solution]

I resolved my issue and am reporting the solution here.  There does appear to be a bug in Turbotax but there is an easy solution, at least in my case. 

I will begin by explaining my problem more fully than in my original post.  I am preparing a tax return for a Trust that received dividend income that was partly Section 199A dividends.  20 percent of Section 199A dividends should be deducted from income, subject to some limitations.  In my case, the trust distributed a portion of income to a beneficiary, which requires that a portion of the Section 199A dividends be passed to the beneficiary and the reminder contribute to the Trust’s QBI deduction. 

My problem was that Turbotax behaved as if the Trust had no Section 199A dividends, so the QBI deduction line of form 1041 was empty, my list of forms did not include a QBI worksheet or a form 8995, and Turbotax cheerfully reported that I had no QBI deduction when I clicked on “QBI deduction” under the Other tab in Step by Step.  But Turbotax did generate a "Qualified Business Income Pass-through Entity Reporting Statement A" that correctly showed the portion of 199A dividends that the beneficiary received.  

I spent over an hour sharing my computer screen with Turbotax support and they could not figure out the problem.  The support person did show me how to open a form 8995 and include it my forms list so I could make manual entries.   I was led to believe I could do that, but today I discovered that while I could manually make entries in form 8995 and the 1041, Turbotax acted as if my Form 8995 did not exist when tried to print forms.  I inferred that a form 8995 would not be sent to the IRS if I e-filed despite being in my list of forms, and that would of course cause problems. 

I was about to give up and do my taxes manually when I got the idea to search for and open the form: “QBI deduction summary: Qualified Business Income Deduction Summary"  using the same procedure Turbotax support showed for opening the Form 8995.   When I opened that form, it appeared in my list of forms correctly filled out, and form 8995 appeared, also correctly filled out. 

I will also note that it appears that it is at least sometimes not possible to reverse selections made in Turbotax.  Once I figured out what I wanted to do, I started over, which required that I re-enter a lot of data.  I’ve resolved in the future to always save the data file after all the raw information in entered and before any selections are made, and keep it as a new starting point if I should ever need it. 

This is my first year with Turbotax.  It has not impressed me.  Unfortunately continuing to do paper returns is now not tenable as the risk of IRS errors processing my paper returns causing me huge headaches has become too great. 

[justguessing]

I have the same problem.  I can find the forms and worksheets you mention but they are not filled in and they will not accept any manual entries.  Very frustrating.

[justguessing]

.... indeed, the ONLY reason I bought TT Business was so that I could file electronically.  Now it looks like I can't do that (unless I am willing to abandon my QBI deduction).  Thank you TurboTax for wasting my time and money.

[justguessing]

Wow, this is weird.  As noted, I couldn't get Form 8995 to populate with info.  I closed the return.  I opened it and the information is now all in Form 8995, and now there is a QBI Deduction Summary where there was none before.