![Holistiplan Logo (800x200 px).webp]](https://help.holistiplan.com/hs-fs/hubfs/Holistiplan%20Logo%20(800x200%20px).webp?width=160&height=40&name=Holistiplan%20Logo%20(800x200%20px).webp){kind=small}
Many owners of sole proprietorships, partnerships, S corporations, and some trusts and estates may be eligible for a qualified business income (QBI) deduction – also called the Section 199A deduction. The deduction allows eligible taxpayers to deduct up to 20 percent of their QBI, plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.
The type of business income modeled in the scenario will impact the data entry needed to model QBI and the subsequent deduction.
Jump to:
Setting up your Scenario and Clearing the QBID Override
Any scenario created by copying a scenario generated by the original tax return will carry with it any QBI deduction from line 13 of Form 1040 as reported on the return. This deduction will show in the QBI Deduction (Calculation Override) field as outlined below. Clear the override by deleting the amount shown in the field, leaving it blank. Continue to update the scenario for current year income information. Instructions on clearing overrides can be found here.
Once the QBI Deduction (Calculation Override) field is clear, review the instructions below for any necessary adjustments needed to model the deduction based on the business income in the scenario.
Schedule C Only (Single Business):
QBI and the QBI Deduction arising from a Schedule C business activity are calculated automatically based on the data entered in the Schedule C Worksheet. To model Schedule C business activity, review our article on Modeling Different Business Structures - Schedule Cs, Partnerships, and S-Corps.
Schedule E Only:
Holistiplan supports individual business entities such as S-Corps and Partnerships that may generate QBI. Both entity selections allow users to indicate whether or not the entity is an SSTB and allow for inputs for the W-2 and UBIA limitations for those taxpayers whose taxable income is over the phase-in threshold.
These articles detail how to enter S-Corp and Partnerships in Holistiplan's Schedule E section:
Multiple Business Entities (a mix of two or more businesses with qualified business income)
QBI and the subsequent deduction are calculated for each business entity separately, and the amount of QBID per business is then added together. Holistiplan does not currently support the calculation of the qualified business income deduction when there are two or more business entities. This could be a mix of Schedule C and E businesses, or two or more Schedule C or Schedule E businesses.
For these instances, calculate the total QBID using Form 8995-A, and enter the amount of deduction in the QBI Deduction (Calculation Override) field.
REIT Dividend / PTP Income, and/or DPAD under 199a(g)
QBI from REIT (Real Estate Investment Trust), Dividend Income/PTP (Publicly Traded Partnership Income, and/or DPAD (Domestic Production Activity Deduction) under 199a(g) should be entered in the respective fields outlined below.
