Originally Posted by dlaudenschlager
Thanks for your reply. I'm concerned that it's not this simple. Multiple accounting web sites claim that the deduction is the LESSER of 20% of QBI, or 20% of TAXABLE INCOME
. Naturally in my case taxable income is less than net business income.
Here are 2 representative sites that mention this: https://www.watsoncpagroup.com/section-199a-deduction/ https://www.bnncpa.com/resources/lib..._thru_entities
That's why I'm asking, where in my simple tax calculation I "insert" this new QBI deduction
- Net business income
- Less deductible half of self-employment tax
- Less contribution to SEP-IRA
- Equals AGI
- Less standard deduction
- Equals taxable income
as yo can see you taxable icnoem on 1040 is lesser than the amt reported on Sch C on line 29 / 31 due to deductions on 1040 as mentioned previously; Qualified items? do not include specified investment-related income, gain, deductions, or loss; for example, items of gain taken into account in determining net long-term capital gain, dividends, and interest income other than that which is properly allocable to a trade or business are not included; nor are items of deduction or loss allocable to such income. You are allowed a deduction for any taxable year of an amount equal to the lesser of:
Your ?combined QBI amount? for the taxable year, or an amount equal to 20% of the excess (if any) of
Ypur taxable income for the taxable year, over any net capital gain for the taxable year.I guess you need to contact an IRS Enrolled Agent/a CPA doing taxes in your local area fr your fed/stat returns.