Form 8995, Qualified Business Income Deduction Simplified Computation

Introduction

Form 8995 is a tax form used to calculate the qualified business income (QBI) deduction for pass-through entities, such as sole proprietorships, partnerships, S corporations, and trusts. Tax-exempt organizations that file Form 990-T use the 8995 attachment to calculate and claim the QBID for unrelated business taxable income (UBTI).

In this resource guide, we will learn about the key aspects of Form 8995, from its purpose to filing requirements and commonly asked questions.

What is Form 8995?

Form 8995, Qualified Business Income Deduction Simplified Computation, is used by eligible individuals, trusts, and estates to calculate and claim the Qualified Business Income Deduction. The QBID allows certain taxpayers to deduct up to 20% of their qualified business income (QBI) from partnerships, S corporations, sole proprietorships, and some trusts and estates.

The deduction is limited to those whose taxable income falls below the specified threshold and is subject to further limitations based on the nature of the business and wages paid.

Who must file Form 8995?

Taxpayers who meet the following criteria must file Form 8995:

• Individuals, trusts, and estates: Those with taxable income below the threshold (currently $182,100 for single filers and $364,200 for joint filers in 2023) and with income from qualified businesses or pass-through entities.
• Owners of partnerships, S corporations, or sole proprietorships: Those who receive qualified business income (QBI) from these entities.
• Tax-exempt organizations filing Form 990-T: Organizations with unrelated business taxable income (UBTI) may use Form 8995 to claim a QBID for their unrelated business activities.

If your taxable income exceeds the threshold, you may need to file Form 8995-A, the expanded version of this form, to calculate the QBID.

Choose TaxZerone to complete your Form 8995 filing

TaxZerone is an IRS-authorized e-file service provider, that offers more than a seamless e-filing experience. By filing with us, you get instant updates on your exempt information return’s filing status, ensuring you're always in the loop.

At TaxZerone, we've designed a user-friendly platform that simplifies the e-filing process and provides comprehensive support at every step.

Here’s how your Form 990-T return with Form 8995 is transmitted to the IRS in 3 simple steps!

1. Provide Organization Details - Choose the tax year for which you want to file the 990-T return, and provide your organization’s details.
2. Preview Form 8995 - Attach Form 8995 to calculate the qualified business income (QBI) deduction for your organization and preview the information provided in the return for accuracy before transmitting.
3. Transmit to the IRS - Transmit Form 8995 along with your 990-T Return to the IRS and get the acceptance in just a few hours.

In case of IRS rejection for your information return, worry not! We offer a hassle-free correction and retransmission process, absolutely free of charge!