Why is my qbi significantly lower than last year and to my own's calculation? I should have a QBI deduction of $1536 but turbo tax only give me $265.

[MonikaK1 · Accepted solution]

You can review your answers to the questions entered in TurboTax to help determine why the deduction calculated is not what you expected. In particular, see if the questions about whether your business activity is a "qualified trade or business" and a "specified service trade or business" were answered. 

TurboTax makes the determination as to whether your self-employment qualifies for the QBI deduction based on your answers to the questions in the Schedule C section if that is the qualifying business activity. You can revisit Schedule C and go over the the questions that appear after the initial income and deduction entries.

QBI is the net amount of qualified income, gains, deductions, and losses from a qualified business. This includes income from partnerships, S corporations, sole proprietorships, and certain trusts.

A qualified trade or business is any section 162 trade or business, with three exceptions:

1. A trade or business conducted by a C corporation.
2. The trade or business of performing services as an employee.
3. For taxpayers with taxable income that exceeds the threshold amount, specified service trades or businesses (SSTBs). 

Please see this help article, this IRS FAQ page, and this IRS webpage for more information.

[your9mare]

TT QBI deduction has a bug in previous disallowed loss freed up in current year when I have a QBI gain. Check your Schedule E Worksheet, Qualified Business Income Deduction Smart Worksheet, Line H3.a, Previously disallowed losses freed up in current year. That negative number offsets your current gross QBI gain, which reduces QBI and further QBI deduction. TT over exaggerated my number (much more negative than my calculation), and completely wiped out my adjusted QBI, in the result dramatically reduced my QBI deduction. That number comes from the same Schedule E Worksheet, but QBI (Section 199A) Losses by Year Smart Worksheet below, subsection Previously disallowed passive losses by year. It should be the sum of all rows of Freed up loss from year 2018-2024. Therefore verify each row amount. In my case TT double counted some rows.