What this line means
The sum of lines 14 and 15 — your final qualified business income deduction. This is the number that goes on Form 1040 line 13a. It reduces your taxable income below the line, meaning you get this deduction on top of the standard or itemized deduction. For most filers, line 15 is zero, so this line equals line 14. 1
Does this apply to you?
- You completed Form 8995 and have a positive amount on line 14, line 15, or both
- You are a sole proprietor, partner, S corporation shareholder, or REIT investor claiming the Section 199A deduction
- You want to know the exact dollar amount to enter on Form 1040 line 13a
- Both lines 14 and 15 are zero, meaning you have no QBI deduction this year
Easy to overlook
This deduction reduces income tax but not self-employment tax The QBI deduction lowers your taxable income for income tax purposes, but it does not reduce the amount subject to self-employment tax. Your SE tax on Schedule SE is calculated before this deduction applies. A $10,000 QBI deduction saves you income tax at your marginal rate but does not touch the 15.3% SE tax. 2 IRS Publication 535 — Qualified Business Income Deduction
The deduction is available through 2025 unless Congress extends it Section 199A was enacted as part of the 2017 Tax Cuts and Jobs Act and is currently set to expire after the 2025 tax year. If Congress does not extend it, this deduction disappears starting with 2026 returns. Filers should claim the full deduction while it is available. 3 IRS Publication 535 — Qualified Business Income Deduction
Watch out for this
Forgetting to transfer this amount to Form 1040. The QBI deduction does not automatically flow from Form 8995 to your 1040 if you are preparing your return by hand. You must enter this line 16 amount on Form 1040 line 13a. Leaving line 13a blank means you completed Form 8995 for nothing — the deduction is not applied and your taxable income is higher than it should be.
Footnotes
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IRS Form 8995 Instructions, Line 16. https://www.irs.gov/instructions/i8995 ↩
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IRS Publication 535, Business Expenses, Chapter 12 (Qualified Business Income Deduction). https://www.irs.gov/pub/irs-pdf/p535.pdf ↩
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IRS Publication 535, Business Expenses, Chapter 12 — Section 199A Sunset. https://www.irs.gov/pub/irs-pdf/p535.pdf ↩