The Qualified Business Income (QBI) deduction, created by the 2017 Tax Cuts and Jobs Act, allows non-corporate taxpayers to deduct up to 20% of their qualified business income. Business owners and beneficiaries with income from a partnership, S corporation, or trust reported on Schedule K-1 are generally eligible for the QBI deduction. TurboTax will automatically make the QBI deduction calculation for you based on your Schedule K-1 entries.
Types of Schedule K-1 Forms
Starting in 2019, the information for your QBI deduction is associated with a certain box and code on your K-1. Your K-1 will also have an attached Section 199A Statement with the amounts needed to calculate your QBI deduction.
The QBI box and code on your K-1 depends on which type of K-1 you have:
- For a partnership Form 1065 Schedule K-1, a Section 199A Statement is associated with box 20, code Z
- For an S corporation Form 1120S Schedule K-1, a Section 199A Statement is associated with box 17, code V
- For a trust Form 1041 Schedule K-1, a Section 199A Statement is associated with box 14, code I (as in India)
Here's how to enter this info in TurboTax:
You may also want to explore the following options for more info about other specific situations that can affect your QBI.