Can I Still Claim the QBI Deduction if I Have Multiple Businesses?
Yes, you can claim the Qualified Business Income (QBI) deduction even if you have multiple businesses. The deduction is calculated based on the combined QBI from all your eligible businesses. You will need to enter the information for each business into the tax preparation software, and the QBI deduction will be computed accordingly.
Key Points to Consider:
- Eligibility Requirements: To claim the QBI deduction, you must have qualified business income (QBI), qualified REIT dividends, or qualified publicly traded partnership (PTP) income.
- Income Thresholds: For 2025, the deduction is fully available if your taxable income before the QBI deduction is $197,300 or less (if single, married filing separately, head of household, qualifying surviving spouse, or trust/estate) or $394,600 or less (if married filing jointly). If your income exceeds these thresholds, you may still qualify but with limitations.
- Form Selection:
- Use Form 8995 if your income is at or below the threshold and you are not a patron in a specified agricultural or horticultural cooperative.
- Use Form 8995-A if your income exceeds the threshold or if you are a patron in a specified agricultural or horticultural cooperative.
- Multiple Business Reporting: You can include all your businesses in the QBI calculation by entering each one’s information into the software. The system will aggregate the QBI from all businesses to determine your total deduction.
- No Itemization Required: You do not need to itemize deductions to claim the QBI deduction. It is a separate deduction that can be claimed regardless of your itemization status.
How to Report QBI from Multiple Businesses:
To ensure accurate calculation, enter all business income details into the tax software. For income reported on K-1s (from partnerships or S corporations), make sure to use the appropriate codes for QBI in the Other Information section. The software will then calculate your total QBI deduction based on all entered businesses.
Source:
Form 8995, Qualified Business Income Deduction Simplified Computation
Form 8995-A, Qualified Business Income Deduction
Schedule K-1 (1065), U.S. Return of Partnership Income
Schedule K-1 (1041), U.S. Income Tax Return for Estates and Trusts
Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions.