Qualified Business Income Deduction, State Local Tax Deduction, and Depreciation

[CYC]

I’m in the heart right now of my first year of doing taxes for ebay. I would like to take the Qualified Business Income Deduction, but am not sure how to do that. I see that there is a form (8995) to complete but where does this end up on my 1040? Is anyone else taking this deduction?

Also, I’ve read that I can deduct state and local taxes but how/where does this happen on the 1040?

Finally, does anyone do depreciation for your laptop or cell phone? I was thinking of doing this (not sure how though-need to investigate), but I don’t solely use my laptop or cell phone for my ebay business.

Any feedback or references to information would be much appreciated!!

 

 

[Jay]

I read about it here: https://www.irs.gov/newsroom/qualified-business-income-deduction

Its all greek to me. I’d ask a tax accountant to help you do your taxes. Anytime you start getting into doing a lot of deductions, I feel much more comfortable having a pro do the work since he’s she will know what is allowed and what are red flags.

The fee we pay to our tax accountant helps me sleep like a baby.

[CYC]

Hi @Jay yes, I do agree about the CPA. I do plan on hiring a CPA next year but this year I really don’t have the profit or money to do it.  I did participate in an online resellers tax academy which mentions this discount so I wanted to see if anyone else takes it especially those who may be doing their own taxes.

[Temudgin]

If you’re not going to use a CPA, you should probably at least consider TurboTax or TaxAct. I have used TaxAct for years and it seems to get me what I’m entitled to (I think it automatically does QBI).

The IRS website has a lot of good information. Here are some links, assuming your business is not a partnership or S- or C-Corporation.

I use the categories listed on IRS form Schedule C (with some explanations provided in the instructions) here:

https://www.irs.gov/forms-pubs/about-schedule-c-form-1040

And for more in-depth questions about what’s deductible and what is not, here:

https://www.irs.gov/publications/p334

[junque redux]

Yes, you can take QBI deduction if you have business income. It ends up on line 13 of your 1040.

State & local taxes are a Schedule A itemized deduction.

For the depreciation look at IRS Publication 946. You may find the deduction is not worth the hassle for these small items with partial business use.

I would at least take to someone like H&R Block or equivalent this year if I were you, and upgrade to a CPA when finances permit.

[CYC]

Thank you for the input @Temudgin and @junque-redux I will definitely consider H&R Block if I end up with more complex questions this year and will definitely be doing the CPA next year!

 

 

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