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June 3, 2019
Question

Should self-employment tax be figured in to the qualified business income deduction calculation?

  • June 3, 2019
  • 1 reply
  • 0 views

Turbotax seems to be calculating my qualified business income deduction by taking my total annual profit (just revenue less expenses, no taxes), deducting 50% of my annual self-employment tax, and then multiplying by 20%.  Is inclusion of the self-employment tax correct here?

1 reply

June 3, 2019

Yes, self-employment tax is excluded when calculating the QBI deduction.

Here's more detailed info:

https://ttlc.intuit.com/replies/7019998

June 3, 2019
Thank you for the quick answer.  In that case, why is Turbotax just using 50% of the total, why not 100%?