No announcement yet.

Qualified Business Income, big difference 2019 vs 2020, did I make a mistake?

  • Filter
  • Time
  • Show
Clear All
new posts

  • Qualified Business Income, big difference 2019 vs 2020, did I make a mistake?

    This year I'm doing my own taxes on TT as I lost faith in my CPA over random issues (Backdoor Roth, Capital loss carryovers, i401k etc etc). As I'm wrapping up my return, I noticed a big difference between my QBI from 2019 versus 2020. My business income is essentially 1099 income from taking call. In 2019 it was roughly $100k and 2020 it was $91k. In 2019 after business deductions, my net profit was $90k and in 2020 it was $85k.

    My confusion is where my QBI calculation is done. I used TT and the same business code was used as 2019 by my CPA. What I found strange was that my 2019 QBI came out to $65k whereas my QBI in 2020 was calculated as $37.5k. I've compared both forms and all numbers are similar except the QBI... Am I making a mistake? I'm sure I'm not providing all the necessary info, please let me know if I'm missing something

  • #2
    No idea but, based on limited info provided, I d/n see how you got those QBI #s in either yr. Did you also have K1’s with 199a pass-through?

    Really don’t recommend DIY w/that much 1099, but it’s your party. There is another option - use a qualified and very experienced (in this area) CPA.
    Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087


    • #3
      I agree, insufficient information.

      The self-employed QBI and the QBI deduction is reduced by any (1/2 SE tax, self-employed health insurance and pre-tax employer retirement plan) deductions.

      Then the QBI and the QBI deduction is subject to phaseout based on taxable income.


      • #4
        I had a W-2 income that was roughly equal to last year's (about $360k) and my 1099 was a few thousand less this year as i noted above. No other income streams. I did contribute the max amount to an i401k both 2019 and 2020. The only different thing i can see on form 8995 is the actual QBI on line 2. I dug trough all the forms and realized that there is a SSTB reduction made on my 2020 form that reduces the QBI down to $37.5. If that is correct, then was my 2019 since it did not have that reduction box checked??

        again, I engaged in no other "business" other than being an on call physician


        • #5
          Check your taxable income and QBI MFJ phaseout bottom (2019 = $321,400, 2020 = $326,600). The (taxable income > phaseout bottom) / $100k = the phaseout percentage.

          Unless 2019 and 2020 were wildly different, it is probably likely that the 2019 return is incorrect and will have to be amended.


          • #6
            Yep that’s what appears to be the problem. Thanks! Another thing my old CPA screwed up on :/