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QBI calculation

Level 3

Hi, I have asked question regarding back out DB contribution from Sch C incomes.  So far, Lacerte still does not reduce DB contribution amount from self-employed incomes.  Do you know when will you fix this?

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3 Replies 3
Employee
Employee

The final Section 199A regs issued by the IRS state that deductions such as one-half of self-employment tax, self-employed health insurance and contributions to qualified retirement plans are considered attributable to a trade or business to the extent an individual's gross income from the trade or business is taken into account in calculating the allowable deduction. Since the trade or business income in not taken into account in calculating the allowable deduction for a defined benefit plan, the deduction does not need to reduce QBI.

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Level 3

But, DB contribution (for self-employed) is still subject to total net incomes from Sch C (per acturary for DB contribution calculation.)

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Level 3

Also, since DB contribution is a big deduction in form 1040, should it turned out this DB contribution also need to be back out of QBI, the underpayment penalty will be very big, too.

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