Does the work my daughter performed as an independent contractor satisfy the QBI deduction?

Forum|Forum|3 years ago
March 5, 2023
1 reply
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My daughter, an in-state student at a Virginia public university, provided research services for a Virginia LLC that had not previously employed her. The company would provide my daughter with a list of college graduates from other colleges and universities and tasked her with profiling each graduate based on their internet/networking/social media presence using her own equipment and Internet services and essentially no performance requirements other than to submit completed profiles when available.

The only information on my daughter’s Form 1099-NEC - Nonemployee Compensation was:

The Payer’s name, address, and federal identification number,
My daughter’s name, address, and Social Security number, and
$1,425.00 in Box 1: Nonemployee Compensation.

Not A Product Question

Best answer by MAK70

Yes, this would qualify for the QBI deduction if she is filing as an self-employed independent contractor. From the IRS:

QBI Component. This component of the deduction equals 20 percent of QBI from a domestic business operated as a sole proprietorship or through a partnership, S corporation, trust or estate. The QBI Component is subject to limitations, depending on the taxpayer’s taxable income, that may include the type of trade or business, the amount of W-2 wages paid by the qualified trade or business and the unadjusted basis immediately after acquisition (UBIA) of qualified property held by the trade or business. It may also be reduced by the patron reduction if the taxpayer is a patron of an agricultural or horticultural cooperative.

MAK70Answer

Yes, this would qualify for the QBI deduction if she is filing as an self-employed independent contractor. From the IRS:

QRFMTOAAuthor

@MAK70

How does she file as a "self-employed independent contractor"?

Thanks!

MAK70

When you enter the 1099-NEC information, you will be asked questions, then you will be able to enter the information for the Schedule C. See Where do I enter Schedule C?