How do I claim the QBI deduction on my tax return (Form 8995)?

The QBI (Qualified Business Income) deduction is claimed on your individual tax return (Form 1040) using either Form 8995 or Form 8995-A, depending on the complexity of your situation. **Form 8995 (Simplified):** Use this if: - Your 2025 taxable income is below $197,300 (single) or $394,600 (MFJ) - You are not involved in an SSTB that is in the phase-out range - You have income from a qualified trade or business **Form 8995-A (Complex):** Use this if: - Your taxable income is above the threshold - You are in the SSTB phase-out range - You have patron reductions, aggregated businesses, or carryforward losses **Step-by-step (Form 8995 simplified):** 1. Enter your qualified business income from each business on Part I 2. Multiply by 20% to get the tentative QBI deduction 3. Compare to 20% of taxable income (before QBI deduction) — take the lesser 4. Enter the result on Form 1040, Line 13 **The deduction appears on Form 1040 Line 13** — between the standard deduction and taxable income. It is NOT on Schedule C. **Carry-forward losses:** If your Schedule C has a net loss, it reduces QBI in subsequent years. Keep track of QBI loss carryforwards if you have a losing year.

• Form 8995 for most self-employed individuals below the income threshold
• Form 8995-A for complex situations (above threshold, SSTB phase-out, multiple businesses)
• QBI deduction appears on Form 1040 Line 13 — not Schedule C
• Limited to the lesser of: 20% of QBI or 20% of taxable income (before QBI)
• Net Schedule C losses create QBI carryforward losses that reduce future QBI