Which tax form do you use to claim the QBI deduction?
You use Form 8995, Qualified Business Income Deduction Simplified Computation, to calculate and report your QBI deduction. At this time, the IRS has only released a draft of this form and states it isn’t ready for filing.
However, we expect a final version of this form will be ready in time for the 2020 filing season when taxpayers file their 2019 tax returns. At that time, you’ll attach Form 8995 to your individual tax return – Form 1040 – and submit it to the IRS.
For 2018 tax returns, you reported or claimed your QBI deduction on line 9 of Form 1040. The instructions included a simplified worksheet that you could use to calculate your deduction, but ultimately, you kept the worksheet. Now, this worksheet will be wrapped into Form 8995.
The QBI deduction is also known as Section 199A. Eligible taxpayers can deduct 20% of the qualified business income they earn from their pass-through businesses.
Looking for more information on the QBI deduction? The following blog posts can help.