sharonvolotko
Level 1
‎03-06-2019 11:50 AM

I have lots of cliens whho file Schedule C.  Most are low income--profit $2000-$20,000   I just went in and regestered all as QBI. Most tax due amounts did not change.  In small income returns, does ProSeries Basic automaticly give the 20% discounted income amount?  Do you just check Yes, QBI and the program does the rest of the calculations? 

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Intuit_Devin
Employee
Employee
‎03-07-2019 02:16 PM

For low income taxpayers, they may be running into the taxable income limitation. The 199A (QBI) deduction is limited to the lesser of 20% of QBI or 20% of taxable income. With the higher standard deductions of $12k/$24k (plus other deductions for things like SE Health Insurance, Retirement, 1/2 SE Tax, etc), it's possible many lower income taxpayers don't have taxable income, so their only tax is SE tax. Since the 199A deduction doesn't impact SE tax, you wouldn't see a change.

In terms of how the program works, as long as they're below the income threshold ($157,500/$315,000), then checking Yes in the QBI smart wksht at the bottom of Sch C should be all you need to do for the 199A deduction to calculate.

mdavolio
Employee
Employee
‎03-07-2019 02:19 PM

Yes, in ProSeries you would check the box saying that the activity is a trade or business and the software automatically runs the QBI computations automatically.

The QBI deduction is limited to 20% of Taxable Income (before the QBID), so that may be the reason these taxpayers are not receiving the deduction.  You can check the QBI worksheet to see the computation.

Thank you,

Mike D'Avolio, Intuit

 

 

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