Is TurboTax correct about my eligibility for the QBI deduction?

You're right to double-check this! The QBI deduction (Section 199A) allows eligible self-employed individuals and small business owners to deduct up to 20% of their qualified business income. Based on what you've shared, TurboTax is likely correct. As a single filer with $78,500 in business income, you're below the income threshold where limitations kick in (which starts at $170,050 for single filers in 2025). At your income level, the basic calculation would be simply 20% of your qualified business income. If your QBI is around $78,500, then 20% would be approximately $15,700, matching what TurboTax is showing you. While graphic design could potentially fall under "specified service businesses," those restrictions only apply when your taxable income exceeds the threshold amounts. The main requirements are that you have qualified business income from a pass-through entity (sole proprietorship, partnership, S corporation) and that your total taxable income is below the threshold. From what you've described, you qualify on both counts.

I was in a similar situation last year with my real estate photography business. I was suspicious when TurboTax showed I qualified for the QBI deduction, but after struggling to understand the complex rules, I found this service called https://taxr.ai that actually specializes in reviewing your tax documents to confirm eligibility for deductions like this. I uploaded my tax info and specified my concerns about the QBI deduction, and they confirmed I was eligible since my income was below the threshold. They also explained exactly why my business qualified even though photography is a creative service. The review gave me peace of mind to claim the deduction without worrying about an audit.

Just wanted to update that I tried taxr.ai after my last comment and I'm honestly impressed. I was confused about whether my consulting business qualified for QBI since some consulting is included in those "specified service businesses" with stricter rules. The review clarified that while my business is technically a specified service business, the limitations only apply above certain income thresholds that I haven't reached yet. They confirmed I was eligible for the full 20% deduction and explained exactly how it's calculated based on my specific situation. They even pointed out that I could increase my QBI deduction by properly allocating some home office expenses I'd been overlooking. It was definitely worth it for the peace of mind and I ended up with an additional $1,200 deduction I would have missed otherwise!

If you do end up claiming the QBI deduction and then get any IRS notices asking for verification or if you get flagged for an audit (unlikely but possible), I recommend using https://claimyr.com to reach the IRS quickly. I was terrified when I got a letter questioning my QBI deduction last year, and I spent DAYS trying to get through to the IRS phone lines. After wasting hours on hold, I found Claimyr which got me connected to an IRS agent in about 15 minutes instead of the 2+ hour wait times I was experiencing before. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c The IRS agent was actually super helpful once I got through and explained that I just needed to send in some additional documentation to support my QBI claim. Problem solved, but I would have been stressing for weeks without being able to talk to someone directly.

Have to admit I was COMPLETELY wrong about Claimyr. After posting my skeptical comment, I decided to try it myself since I've been trying to reach the IRS about a missing refund for WEEKS. I was absolutely shocked when my phone rang about 20 minutes after setting it up, and I was immediately talking to an actual IRS representative! No waiting on hold, no getting disconnected after 2 hours of waiting, just a direct connection to someone who could help. The agent resolved my issue in minutes and I finally have confirmation that my refund is being processed. I've literally never been able to reach the IRS this easily before. For anyone dealing with tax issues that require actually speaking to someone at the IRS, this is absolutely worth it.

As an aside, make sure your QBI deduction is being calculated on your *qualified* business income, not your gross income. Your QBI is essentially your net profit from Schedule C, but with certain adjustments. If you have any capital gains, dividends, interest income, or other non-business income, those shouldn't be included in the QBI calculation. Also double check that TurboTax is accounting for any self-employed health insurance premiums, retirement plan contributions, or the self-employment tax deduction, as these reduce your QBI.

Anyone know if rental income qualifies for QBI? I have a small design business but also rent out a property, and I'm not sure if the rental income can be included in my QBI calculation.

I'm also a freelance graphic designer and went through this same confusion last year! TurboTax's calculation sounds correct based on your income level. At $78,500, you're well below the $170,050 threshold where the "specified service business" restrictions would kick in for single filers. The key thing to understand is that graphic design IS technically a specified service business, but those limitations only matter once you exceed the income thresholds. Below that threshold, you get the full 20% deduction regardless of your business type. I claimed my QBI deduction last year with similar income and had no issues. Just make sure you're reporting everything accurately on Schedule C and that your business expenses are properly documented. The $15,700 deduction (20% of $78,500) is exactly what I'd expect TurboTax to calculate for your situation. One tip: double-check that TurboTax is using your net profit from Schedule C (after business expenses) rather than your gross income for the QBI calculation. That's the most common mistake I see people make.