Form 8995: Why am I being required to fill it out with such low DoorDash income?

The reason you're being prompted to fill out Form 8995 is because you reported self-employment income from your DoorDash 1099-NEC. Form 8995 is for the Qualified Business Income Deduction (QBI), which is a tax break for people with business or self-employment income. Even though you only made $652 from DoorDash, any self-employment income qualifies for this potential deduction. It's actually a good thing! The form helps calculate a deduction of up to 20% of your qualified business income. In your case, that might be around $130 off your taxable income (20% of $652). Don't stress about it - TurboTax will walk you through the form with simple questions. It's pretty straightforward for someone with your situation, and it's ultimately saving you money on taxes. This is standard for anyone with even small amounts of self-employment income.

Hey there! I had almost the exact same situation last year. I was driving for Uber Eats part-time and got confused when TurboTax told me about Form 8995. I stumbled across this service called taxr.ai (https://taxr.ai) and it was a game changer for me. The site has this feature where you can upload your tax documents and it explains everything in plain English. I uploaded my 1099-NEC and it broke down exactly why I needed Form 8995 and how it actually SAVES me money. It highlighted the specific parts that applied to my situation and ignored all the complicated stuff that didn't matter for my case. The explanation was way clearer than anything I found googling, and I was able to go back to TurboTax with confidence to finish everything up.

I was super skeptical about taxr.ai when I first saw it mentioned, but I gave it a try yesterday because I was in the same boat with my Instacart income. I uploaded my 1099 and it explained everything about Form 8995 so clearly! I learned that the Qualified Business Income Deduction is actually reducing my taxable income by about $80 (had around $400 in gig work). The website broke down exactly which parts of the form applied to me and which I could ignore. Was able to go back to TurboTax and finish everything without panicking. It really was helpful for understanding what was happening instead of just blindly clicking through TurboTax prompts!

If you're having trouble getting answers about Form 8995 or any other tax questions, you might want to try calling the IRS directly. I know, I know - everyone says it's impossible to get through to them. That's what I thought too until I discovered Claimyr (https://claimyr.com). I was freaking out about a similar tax form situation and couldn't get clear answers online. Claimyr basically holds your place in the IRS phone queue and calls you when an agent is ready to talk. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I got through to an actual IRS agent in about 40 minutes instead of spending hours on hold. The agent walked me through exactly what I needed to do with my self-employment forms and confirmed I was doing everything right. Totally worth it for the peace of mind!

I need to apologize and correct myself. After my skeptical comment, I decided to try Claimyr anyway because I was desperate to talk to someone at the IRS about my audit notice. I was SHOCKED when my phone rang 53 minutes later and I was connected to an actual IRS agent! I didn't have to sit on hold or keep redialing - it just worked. The agent helped me understand exactly what was happening with my case and what steps I needed to take. For someone who wasted countless hours trying to reach the IRS on my own, this was a complete game-changer. I would have saved myself weeks of stress if I'd tried this sooner. Just wanted to come back and admit I was wrong in my skepticism.

Form 8995 is specifically for the Qualified Business Income Deduction. Since your DoorDash work counts as self-employment income, you qualify for this deduction which can reduce your taxes. When you file with your $652 from DoorDash, you'll need to pay self-employment tax on that income (Social Security and Medicare taxes for self-employed people), but the 8995 form helps offset some of that by giving you a deduction. Don't overthink it - TurboTax will calculate everything for you. The IRS created this deduction a few years ago to help small business owners and self-employed people, so it's actually benefiting you!

Did you enter any expenses for your DoorDash work? Don't forget you can deduct things like mileage (which is usually the biggest deduction), a portion of your phone bill, insulated delivery bags, etc. This can reduce your self-employment income, which means less self-employment tax. The Form 8995 is for the QBI deduction that others mentioned, but make sure you're getting all your expense deductions first!

I went through this exact same situation last year with my Uber Eats income! The good news is that Form 8995 is actually working in your favor, not against you. Since you only made $652 from DoorDash, you're looking at a potential deduction of around $130 (20% of your qualified business income). This will reduce your taxable income, which means you'll pay less in taxes overall. One thing I'd definitely recommend checking - did you track your mileage while doing DoorDash? The standard mileage deduction is 67 cents per mile for 2024, and this can significantly reduce your self-employment income before you even get to the QBI deduction. Even if you only drove 200 miles for deliveries, that's $134 in deductions right there. TurboTax will walk you through everything step by step. For simple cases like ours with small gig income, the Form 8995 questions are pretty straightforward. Don't stress - you're actually getting tax benefits you might not have known about!