Simple (I hope) tax question re: the QBI 20% deduction

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louiethelilac
Posts: 26
Joined: Tue Aug 11, 2015 6:47 pm

Simple (I hope) tax question re: the QBI 20% deduction

Post by louiethelilac » Sat Mar 10, 2018 12:00 pm

My wife has a small ($30K per year) part time sole consulting practice (she gets paid via 1099s only) for which she has filed her self employment income on Schedule C for years as part of our joint 1040. She has never considered setting up anything like an LLC or other official entity; does she have to now however in order to take advantage of the new pass-through deduction, or will our tax prep software (we use HR Block Taxcut) automatically account for the 20% exclusion against that Schedule C income when computing our 2018 taxes? Thanks.

Spirit Rider
Posts: 7977
Joined: Fri Mar 02, 2007 2:39 pm

Re: Simple (I hope) tax question re: the QBI 20% deduction

Post by Spirit Rider » Sat Mar 10, 2018 9:27 pm

A sole proprietorship is fine. No need for an LLC.

I would assume all tax software will be able calculate the 20% QBI deduction. It is more complicated than just the Schedule C business income. Other taxable income can impact the QBI.
Last edited by Spirit Rider on Sat Mar 10, 2018 9:33 pm, edited 1 time in total.

Lafder
Posts: 3718
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: Simple (I hope) tax question re: the QBI 20% deduction

Post by Lafder » Sat Mar 10, 2018 9:30 pm

Is she doing solo401k or SEP for pretax retirement account contributions?

That is another way to save on taxes.

lafder

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