Business Income not showing on 8995-A

Forum|Forum|1 year ago
January 31, 2025
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In 2023 my small business income showed on form 8995. This year, it is not showing on the 8995-A (Income over the 8995 limit). My business qualified last year as a qualified trade or business and the business has not changed. The net income from my business should be considered QBI, and should be on form 8995-A

Shannon B1

The QBI deduction amount depends on your total taxable income, which includes wages, interest, capital gains, and other income, in addition to income from your business. If your taxable income reaches or exceeds $191,950 (or $383,900 if filing jointly), the deduction may be reduced or eliminated, depending on the nature of your business. Here's a TurboTax Help Article that explains more on this topic.

dhfishinAuthor

How does Turbotax determine that my business is an SSTB? The IRS general definition is "the principal asset is the reputation or skill of one or more of its employees or owners". This is not the case for my business. Turbotax seems to think my business is an SSTB. How do I change that?

Shannon B1

The "work description" you provide for your business determines its business code. TurboTax automatically assigns this code based on your description, and the IRS uses it to determine your SSTB (Specified Service Trade or Business) status.

Here’s how to change your business "work description" in TurboTax:

Open or continue your tax return.
Go to the Schedule C section:
- TurboTax Online/Mobile: Go to Schedule C.
- TurboTax Desktop: Search for Schedule C and click the "Jump to" link.
Answer any business questions until you reach the "Your self-employed work summary" screen.
Select "Edit" or "Review" next to your business.
On the "Here’s your business info" screen, scroll down to the "Business summary" section.
Click "Edit" next to "Your business info" and change the "work description" of your business. This will automatically update the business code.