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QBI calculation

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Level 6

Any idea when the QBI  deduction is going to start calculating at 20% instead of 18.6%. Would really like to get these filed

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Champion
Champion

Are you saying the math on the 8995 is bad? Or which QBI calculation are you referring to?


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 6

On line 10 of the 1040, the amount for the QBI Deduction is calculating 18.6% instead of 20%. 

I don't have many of these so I may be missing something. Thanks.

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Level 10

$10,000 Sch C Income
x .9235
---------
$ 9,235
x .153
----------
$1,413 SE Tax

$10,000
-   706  (1/2 SE Tax)
---------
$ 9,294  Net earnings effectively connected to business activity
x 20%
---------
$1,859  QBI Deduction (assuming no other limits apply)

18.59% is correct when including a simple SE tax calculation

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Level 6

I found it. The credit for the Employer's portion of SE tax reduces the Schedule C profit and then the QBI calculates.

My mistake, sorry about that.

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Champion
Champion

8995 would have walked you through it, never rely on just looking at 1 figure, find the form or worksheet with the computation.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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