Fill out Form 8995 (Qualified Business Income Deduction Simplified Computation) online
Form 8995 is the simplified version used to calculate the Qualified Business Income (QBI) deduction under Section 199A. This deduction allows eligible taxpayers to deduct up to 20% of qualified business income from pass-through entities such as sole proprietorships, partnerships, S corporations, and certain trusts and estates.
How to fill out Form 8995 (Qualified Business Income Deduction Simplified Computation)
Identify qualified businesses
List each trade or business that generates qualified business income. Include income from Schedule C, Schedule E (partnerships and S corporations), and Schedule F.
Enter qualified business income for each
For each business, enter the net qualified business income amount. This is the net income from the business reduced by related deductions such as the deductible portion of self-employment tax.
Calculate the total QBI deduction
Combine the QBI from all businesses and multiply by 20%. Compare this amount to 20% of your taxable income before the QBI deduction (minus net capital gains). The deduction is the lesser of the two amounts.
Enter the deduction on Form 1040
Transfer the QBI deduction from Form 8995 to Form 1040, line 13. This reduces your taxable income but does not reduce adjusted gross income or affect other AGI-based calculations.
About Form 8995 (Qualified Business Income Deduction Simplified Computation)
Who needs this form
Taxpayers with qualified business income whose taxable income before the QBI deduction is at or below $191,950 (single) or $383,900 (married filing jointly) for the applicable tax year. Taxpayers above these thresholds must use the more detailed Form 8995-A instead.
Where to submit
Attach Form 8995 to your Form 1040 or 1040-SR when filing your annual federal income tax return. The deduction is reported on Form 1040, line 13.
Source and content freshness
- Reviewed: 2026-02-24
- Filing deadlines may shift for weekends and holidays. Verify due dates with official instructions.
Common mistakes to avoid
- Using Form 8995 when taxable income exceeds the simplified computation threshold (Form 8995-A is required instead)
- Including wages or guaranteed payments from a partnership in qualified business income (these are not QBI)
- Forgetting to reduce QBI by the deductible portion of self-employment tax, self-employed health insurance, or SEP/SIMPLE contributions
- Not separately calculating QBI for each qualified trade or business before combining them
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