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red-beard-aero
Level 1

Does QB estimated tax account for self-employment tax deduction or qualified business income deduction?

After comparing QB estimated tax values with my manual calculations using the IRS worksheets, it appears as though QB only includes the standard deduction by default. The deduction amount can be manually adjusted in the tax profile and is not the concern of this post. This post is focused on the line item deductions of the IRS estimated tax worksheet compared to the QB calculation. According to the 1040-ES worksheet, the self-employment tax deduction, the standard/itemized deduction, the qualified business income (QBI) deduction, and credits (e.g. children) can all be accounted for in the final estimated tax calculation. The QB "Estimated taxes explained" post says, "We don’t calculate other types of tax estimates or more complicated tax scenarios." Based on that statement and the list that follows, I would expect credits to not be calculated; I could see how the QBI deduction would be considered a 'more complicated tax scenario'; and the self-employment tax deduction is only one extra step after calculating the self-employment tax so this seems easily included in the QB calculation. Can anyone confirm if the QBI and self-employment tax deductions are/are not included in the QB estimated tax calculation?
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Best answer June 17, 2020

Best Answers
Ashley H
QuickBooks Team

Does QB estimated tax account for self-employment tax deduction or qualified business income deduction?

Good morning, @red-beard-aero.

 

Yes, you're spot on about the Taxes in QuickBooks Self-Employed. The QBI and the Self-Employment Tax Deductions aren't included in the QuickBooks Estimated Tax Calculation. You can refer to this Community Article to learn more about how Estimated Taxes work in QuickBooks Self-Employed: How we calculate estimated tax payments.

 

If you need further assistance, please don't hesitate and reach back out to me. I've got your back. Take care!

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4 Comments 4
Ashley H
QuickBooks Team

Does QB estimated tax account for self-employment tax deduction or qualified business income deduction?

Good morning, @red-beard-aero.

 

Yes, you're spot on about the Taxes in QuickBooks Self-Employed. The QBI and the Self-Employment Tax Deductions aren't included in the QuickBooks Estimated Tax Calculation. You can refer to this Community Article to learn more about how Estimated Taxes work in QuickBooks Self-Employed: How we calculate estimated tax payments.

 

If you need further assistance, please don't hesitate and reach back out to me. I've got your back. Take care!

View solution in original post

red-beard-aero
Level 1

Does QB estimated tax account for self-employment tax deduction or qualified business income deduction?

Thanks for the confirmation. My estimated tax numbers between QB and manual calculations had been matching early in the year but had significantly diverged midyear. These deductions were the only things I could point to that were the culprit.

mapalazzolo
Level 1

Does QB estimated tax account for self-employment tax deduction or qualified business income deduction?

Should a spouses W2 income be included in the Quick Books Self-Employed Tax Profile?  It seems that the quarterly tax estimator is using only business net income.  It seems estimated taxes might be low for a small business owner with low business income married to a high earning W2 employee. 

MariaSoledadG
QuickBooks Team

Does QB estimated tax account for self-employment tax deduction or qualified business income deduction?

Allow me to join you on this thread and help you correctly set up your tax profile, mapalazzolo.

 

Yes, you can include your spouse W2 in your tax profile if you're legally married under state law, live together in a state-recognized common-law marriage, or are separated but have no final divorce decree as of the end of the tax year.

 

Here's an annual tax guide for QuickBooks Self-Employed account.

 

For your reference, here's an article that you can check if you have the 1099 MISC and W-2: File Taxes When You Have Both 1099-MISC And W-2 Income.

 

Reach out to us if you need further assistance with your estimated tax. I'll be right here if you need help.

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