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Instructions for IRS Form 8995
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Instructions for IRS Form 8995 Qualified Business Income Deduction Simplified Computation
This document contains official instructions for IRS Form 8995 , Qualified Business Income Deduction Simplified Computation - a tax form released and collected by the Internal Revenue Service (IRS), a subdivision of the U.S. Department of the Treasury. An up-to-date fillable IRS Form 8995 is available for download through this link.
FAQ
Q: What is IRS Form 8995?
A: IRS Form 8995 is a form used to calculate the qualified business income (QBI) deduction.
Q: What is the qualified business income deduction?
A: The qualified business income deduction allows eligible individuals to deduct a portion of their qualified business income from their taxable income.
Q: Who is eligible for the qualified business income deduction?
A: Sole proprietors, partnerships, S corporations, and certain trusts and estates may be eligible for the qualified business income deduction.
Q: What is a simplified computation?
A: The simplified computation method on IRS Form 8995 allows certain taxpayers to calculate the qualified business income deduction using a simplified formula.
Q: Who can use the simplified computation method?
A: Taxpayers with taxable income below certain thresholds can use the simplified computation method.
Q: What are the thresholds for using the simplified computation method?
A: For 2021, the thresholds are $164,900 for single filers and $329,800 for married filing jointly.
Q: What are the steps for completing IRS Form 8995 using the simplified computation method?
A: The steps include entering your qualified business income, determining your taxable income, and calculating the deduction using a specific formula.
Q: What other documentation is required when filing IRS Form 8995?
A: You may need to provide additional supporting documents, such as Schedule K-1 if you are a partner in a partnership or a shareholder in an S corporation.
Q: Is professional tax assistance recommended for completing IRS Form 8995?
A: If you have complex business income or are unsure about how to complete the form, it is recommended to seek professional tax assistance.
Instruction Details:
- This 10-page document is available for download in PDF;
- Actual and applicable for filing 2023 taxes;
- Complete, printable, and free.
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