January 27, 2020 at 4:29 am #5180SashaParticipant
1099-DIV of Vanguard Total Market Index Fund shows $100 in Box 5. This amount is also included in Box 1a.
What forms should I enter this amount on? What do I have to do with this amount so I don’t end up double taxing it?
PS. This is the first year that I’ll probably have to use a tax software to file taxes. I hope FreeTaxUSA can handle this one and NIIT.January 28, 2020 at 3:36 am #5184kaneoheParticipant
Yes, hopefully the software will handle this. I tried this on another software program and it looks like it filled out Pt IV of F8995A starting with line 28.
In a simplified example, it took Box 5 and took 20% of that as the QBI deduction compared it to some other calculation that could have limited the deduction but didn’t, then took the QBI deduction and entered it on the 1040 on the line below the normal deduction (itemized or std) and combined them to make a bigger deduction so that would reduce your taxes.
January 28, 2020 at 12:37 pm #5187kaneoheParticipant
- This reply was modified 1 year, 8 months ago by kaneohe.
Apparently there are 2 forms 8995 and 8995A. Use the appropriate one.
“Use Form 8995 (Qualified Business Income Deduction—Simplified Computation) if:
the taxpayer has QBI, qualified REIT dividends, or qualified PTP income;
2019 taxable income before QBI deduction isn’t more than $160,700 ($321,400 if married filing jointly); and
the taxpayer isn’t a patron in a specified agricultural or horticultural cooperative.
Use Form 8995-A (Qualified Business Income Deduction) if:
the taxpayer has QBI, qualified REIT dividends, or qualified PTP income, and
2019 taxable income before QBI deduction is more than $160,700 ($321,400 if married filing jointly); or
the taxpayer is a patron in a specified agricultural or horticultural cooperative.”January 29, 2020 at 3:15 am #5190SashaParticipant
Thank you, Kaneohe. This is very helpful.
I’m planning to start the process of testing FreeTaxUSA on the weekend while I’m still waiting for the rest of 1099’s to come.
At least we qualify for the ‘simpler’ form – 8995, but who would have thought that an index fund would have such weird things in them though yes, I realize, all this is thanks to the tax ‘overhaul’ that was supposed to simplify tax filing LoL.May 29, 2020 at 1:37 pm #6695Lewis-HParticipant
Section 199A dividends are otherwise unqualified dividends originating from an REIT source. As pass-through corporation income, you are entitled to deduct 20% of the gross amount by entering it as a Section 199A deduction on Form 1040, Line 10. New in 2019, you must file Form 8995 to figure the deduction, but it will be as simple as 20% of your Section 199A dividends.
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