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January 31, 2024
Question

QBI differs from net income

  • January 31, 2024
  • 1 reply
  • 0 views

My QBI is less than my net business income.  My net business income has no interest, dividends or foreign income.  Why is Turbotax discounting (approximately 7% less) my net business income.

1 reply

VolvoGirl
Employee
January 31, 2024

You have to subtract 1/2 the SE tax which is about 7.65%

 

Jan 20, 2019 update

The IRS released the Final Regulations that clarified that

(1) the 1/2 SE tax deduction,

(2) Self Employed Health Insurance deduction, and

(3) employer retirement contributions

need to be subtracted from your business profit to determine "Qualified Business Income" (QBI) for the 20% deduction.