I Have Qualified Business Income, and Taxable Income, but I Do Not See That the QBI Deduction Is Being Reported on My Return
If you have entered qualified business income (QBI) and taxable income, but the QBI deduction is not appearing on your return, there are several possible reasons. The deduction may not calculate if certain conditions are not met or if the software requires additional steps to process the deduction.
Common Reasons Why QBI Deduction May Not Appear
- No Taxable Income: The QBI deduction cannot be calculated if your taxable income is $0. Even if you have QBI, you must have taxable income for the deduction to apply.
- Missing Business Income Entry: Ensure that your business income is properly entered in the software. If your income comes from a K-1, you must enter it in the "Other Information" section using the correct QBI codes.
- Incorrect Form Selection: Depending on your taxable income level, you may need to use either Form 8995 or Form 8995-A. If your taxable income before the QBI deduction exceeds $197,300 (or $394,600 if married filing jointly), you must use Form 8995-A.
- Software Processing Issue: Sometimes, the software may not automatically apply the deduction. You may need to manually add it by navigating to the Federal section > Deductions > Show More next to Qualified Business Income Deduction - Form 8995 / 8995-A, then selecting the business income to be considered for QBI.
How to Manually Add QBI Deduction in OLT Software
- Go to the Federal section in the left-hand menu.
- Select Deductions.
- Click Show More next to "Qualified Business Income Deduction - Form 8995 / 8995-A".
- Select the business income you want to consider for the QBI deduction.
- Save and return to the Income checklist page.
If you still do not see the deduction after these steps, check for any warnings in the tax summary. You may be able to continue with filing by selecting “Ignore and Continue,” but ensure all required information is correctly entered.
Eligibility Criteria for QBI Deduction
- You must have QBI, qualified REIT dividends, or qualified PTP income.
- Your taxable income before the QBI deduction must be ≤ $197,300 (single, head of household, etc.) or ≤ $394,600 (married filing jointly).
- You cannot be a patron in a specified agricultural or horticultural cooperative.
The deduction is limited to 20% of taxable income (before QBI deduction) and cannot exceed 20% of net QBI.
Source:
Form 8995-A
Form 8995
Disclaimer: Always verify details with official IRS forms and instructions from the Federal or State Department of Revenue.