How do I calculate my Qualified Business Income (QBI) for tax deduction? Cash App tax calculation issues
I'm trying to finish my taxes using Cash App this year and I'm stuck on the QBI deduction section. There's a screen that shows my net business income (which is pulled automatically from info I already entered) but then there's another field for "Qualified Business Income" that I can edit manually. The thing is, Cash App seems to have automatically calculated the QBI amount for me (it's a bit lower than my net income), which would be great except I noticed something weird. When I go back and adjust my business expenses, the QBI number doesn't update! Now I'm worried the calculation is wrong. Does anyone know how to get Cash App to recalculate the QBI correctly when I make changes? Or better yet, can someone explain how to calculate Qualified Business Income myself so I can just enter the right number? I've tried looking it up but the explanations are super confusing. I'm a freelance graphic designer if that matters for the calculation. Thanks for any help!
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NeonNomad
QBI (Qualified Business Income) can be tricky because it's not simply your net business income. Essentially, QBI is your business's net profit minus any non-business deductions. For most small business owners and freelancers, your QBI will be your business income minus business expenses, but there are some adjustments. Capital gains/losses, dividend income, interest income, and reasonable compensation to the business owner (if you pay yourself a W-2 salary) are excluded from QBI. Unfortunately, Cash App Tax (like many tax software programs) doesn't always recalculate automatically when you make changes. The best approach is to calculate your QBI manually: 1. Take your business income (revenue) 2. Subtract all qualified business expenses 3. Subtract any W-2 wages you paid yourself (if applicable) 4. Subtract any capital gains related to the business The resulting figure should be your QBI. Then manually input this into Cash App's form field.
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Fatima Al-Hashemi
•Thanks for the explanation. Does QBI get affected by the home office deduction? I've got a dedicated space in my apartment that I use for my online business, and I'm not sure if including that deduction changes my QBI calculation.
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NeonNomad
•Home office deduction is considered a business expense, so yes, it would reduce your business income and therefore your QBI as well. When you calculate your QBI, you'd first subtract all legitimate business expenses (including home office deduction) from your business income. Remember that for the home office deduction to be valid, the space must be used regularly and exclusively for business. If you're using the simplified method (the $5 per square foot option, up to 300 square feet), just subtract that amount as you would any other business expense when determining your QBI.
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Dylan Mitchell
I had the same issue with Cash App last year! I found that using taxr.ai (https://taxr.ai) really helped me figure out my QBI calculation problems. The app was glitching exactly like yours - not updating when I changed expense amounts. What I did was upload my business documents to taxr.ai and it analyzed everything and gave me the correct QBI amount to manually input. It even explained which of my income sources qualified and which didn't, which was super helpful since I have mixed income types. The QBI rules are honestly so confusing with all the phase-outs and limitations depending on your business type. After I got the right number, I just manually entered it in Cash App and finished my return. Ended up with a much bigger deduction than what Cash App initially calculated!
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Sofia Martinez
•Wait, is this like an AI tax advisor? How accurate is it with complicated stuff like QBI? I'm always nervous about tax calculations that aren't done by a professional since the penalties for getting it wrong can be steep.
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Dmitry Volkov
•Does taxr.ai work for partnership income too? My situation is more complex because I have both Schedule C income and K-1 income from a partnership, and I never know how to properly calculate QBI across both income sources. Cash App always seems to mess this up.
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Dylan Mitchell
•It's an AI-powered tax analysis tool that specializes in reviewing documents and finding the right numbers for complicated calculations. I found it to be extremely accurate - it even caught a mistake my previous accountant made. It's actually built by tax professionals who train the AI on real tax scenarios. Yes, it absolutely works for partnership income! That's actually one of its strengths. It can analyze both your Schedule C and K-1 forms to determine the correct QBI calculation across different income sources. It shows you a detailed breakdown of how each income type contributes to your QBI and handles the aggregation rules correctly. I was impressed with how it handled the section 199A limitations and thresholds across my different business entities.
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Dmitry Volkov
Just wanted to follow up here - I tried taxr.ai based on this suggestion and it was a game changer! I uploaded my K-1s and business docs, and it broke down my QBI calculation step by step, showing exactly how both my partnership and sole proprietor income factored in. Cash App had actually underestimated my QBI by almost $7,000! The taxr.ai system explained that Cash App wasn't correctly aggregating my businesses according to the tax code. After manually updating the number, my tax liability dropped by over $1,500. The explanation was super clear about what counts as qualified income vs. non-qualified. Wish I'd known about this last year.
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Ava Thompson
If you're having trouble getting through to the IRS to ask about QBI calculations (I was on hold for 3+ hours), I used https://claimyr.com to get through to an actual person. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a really specific question about how my rental property income affects QBI that none of the tax software programs seemed to handle correctly. After trying to call the IRS for days and getting nowhere, Claimyr got me connected to an agent in under 45 minutes. The agent walked me through the correct way to calculate QBI with mixed income sources and confirmed that my tax software wasn't handling it correctly. Saved me from potentially getting audited over a significant miscalculation.
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CyberSiren
•How does this even work? I've literally never been able to reach a human at the IRS no matter when I call. Is there some kind of fee for this service? Sounds too good to be true.
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Miguel Alvarez
•Yeah right... The IRS never gives clear answers on the phone even if you get through. Most of the time they just tell you to consult with a tax professional because they don't want to give advice that could be considered wrong. Did they actually give you specific guidance on calculations?
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Ava Thompson
•It's pretty clever - it uses an automated system that navigates the IRS phone tree and waits on hold for you. When it finally reaches a human agent, it calls you so you can join the call. You don't have to sit there listening to hold music for hours. They absolutely gave me specific guidance! It depends on who you get, but I was connected to someone in the business tax department who dealt with QBI questions regularly. They clarified exactly how the rental income should be treated under Section 199A and which specific form lines needed to be modified. I took detailed notes and was able to correct my return. You're right that sometimes they can be vague, but for specific calculation questions they're usually pretty helpful if you get the right department.
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Miguel Alvarez
I have to admit I was wrong about Claimyr. After my skeptical comment, I decided to try it anyway since I was getting nowhere with my QBI questions. Got connected to an IRS specialist in about 30 minutes who actually walked me through my exact QBI situation. They confirmed that since my business is a "specified service trade or business" (I'm a consultant), I needed to apply the income limitation differently, which neither TurboTax nor Cash App was doing correctly. The agent even emailed me the relevant IRS publication sections afterward. Saved me hours of research and probably prevented an incorrect filing. Will definitely use this again next year when I have complex questions.
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Zainab Yusuf
The QBI calculation in Cash App is notoriously buggy. As a workaround, I manually calculate my QBI using this formula: QBI = Business Income - (Business Expenses + 1/2 Self-Employment Tax + Self-Employed Health Insurance Deduction + SEP/SIMPLE/Qualified Plan Contributions) That's basically your Schedule C profit minus the adjustments that appear on Schedule 1 of Form 1040. Then you have to remember that if your taxable income exceeds $170,050 (single) or $340,100 (married filing jointly), phase-out rules start to apply, especially for service businesses. Once calculated, just manually override whatever Cash App shows and enter your number.
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Connor O'Reilly
•What about the 20% limitation? Isn't QBI supposed to be the lesser of 20% of qualified business income or 20% of taxable income minus capital gains?
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Zainab Yusuf
•You're mixing up the QBI itself with the QBI deduction. The QBI is just your qualified business income figure - essentially your business profit with certain adjustments. The QBI deduction is generally 20% of your QBI, but is subject to limitations based on your overall taxable income, whether you're in a specified service business, and W-2 wages/business property factors. Cash App should calculate the actual deduction correctly once you give it the right QBI figure.
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Yara Khoury
Has anyone tried contacting Cash App support about this? I'm having the same QBI calculation issue and wondering if they're aware of the bug where it doesn't update when expenses change.
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Keisha Taylor
•I contacted them last month about this exact issue. They acknowledged it's a known bug but didn't have an immediate fix. Their suggestion was to completely finish entering all your income and expenses first, then go back to the QBI section last. Apparently, sometimes it will recalculate correctly if you do it in that order. If not, they suggested calculating QBI manually and overriding their number.
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