Do I need to fiile Form 8995 (Qualified Business Income Deduction ) if my small business had loss in 2022?

Forum|Forum|3 years ago
March 19, 2023
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I started my single-member LLC last year, and no business income but just business expense.

When TurboTax asked me , if my business 'is qualified business income', I selected 'Yes', then Turbotax generated Form 8995 -Qualified Business Income Deduction for me. (My business income is supposed to be QBI qualified if I have any. That's why I select 'Yes'). On this form, the business loss was reported, naturally, the QBI deduction=0. Is that fine to file my tax along with this $0 deduction form? or Should I select 'No, none of this work is qualified' so that TT won't generate Form 8995 for my business this year?

Best answer by AnnetteB6

Yes, it is ok to file your return with Form 8995 showing a zero deduction amount based on an overall loss from your business.

The instructions for Form 8995 do not limit its use to businesses only reporting a gain. It says that line 1c should be the net qualified business income or (loss).

For your reference, here are the instructions: Form 8995 Instructions

AnnetteB6Answer

Yes, it is ok to file your return with Form 8995 showing a zero deduction amount based on an overall loss from your business.

The instructions for Form 8995 do not limit its use to businesses only reporting a gain. It says that line 1c should be the net qualified business income or (loss).

For your reference, here are the instructions: Form 8995 Instructions

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Mike9241

yes because the tax laws required that QBI loss carryforwards be offset against future QBI income. failure to report QBI carryforward losses and then take QBI deduction on future income ignoring the loss carryforward you are violating the tax laws,