Form 8995 is a tax form used to calculate and claim the Qualified Business Income (QBI) deduction. This deduction is available to eligible taxpayers who have qualified business income from pass-through entities or certain sole proprietorships.
Here are some key points about Form 8995:
- Purpose of the deduction: The Qualified Business Income (QBI) deduction is a tax benefit introduced as part of the Tax Cuts and Jobs Act (TCJA) of 2017. It allows eligible taxpayers to deduct a portion of their qualified business income from sole proprietorships, partnerships, and S corporations.
- Eligibility: To be eligible for the QBI deduction, you must have qualified business income. However, certain types of businesses, such as specified service trades or businesses (SSTBs), may have limitations on how much they can deduct.
- Simplified computation: Form 8995 is a simplified version of the QBI deduction calculation. It is used for taxpayers with income below certain thresholds and whose businesses don’t fall into the category of specified service trades or businesses.
- Reporting: When you file your return with us, you don't have to worry about this form. We'll take the income and information you report on your return to determine if you qualify for the deduction. If you do, we'll automatically add it to your return.