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Video instructions and help with filling out and completing Will Form 1065 Schedule M 3 Accrual

Instructions and Help about Will Form 1065 Schedule M 3 Accrual

Hey, this is John with PDF Tex. This is the qualified business income deduction worksheet for 2018. It's a brand new worksheet that allows you to take a 20% deduction on your business income. So, there will be a lot of people using this worksheet this year. As you can see from the title, this is the simplified worksheet. In order to use this worksheet, you must have qualified business income and your taxable income has to be less than $157,500 or, if you're married filing jointly, less than $315,000. Qualified business income is income from a business that you would report on Schedule C on form 1040. It could also be income from a pass-through entity, such as a partnership or an S corporation. All three of these types of income qualify as business income. Now, what happens if you have taxable income above the mentioned levels? Well, in that case, you have to use a different worksheet, which is a lot more complex. You can find this worksheet in IRS Publication 535. Hopefully, you can use this simplified worksheet because it's easier to understand and use. Additionally, the definition of qualified business income is less restricted on this worksheet compared to the more complex one. If you have a Schedule C, a partnership, or a K-1 from an S corporation and your income falls below the mentioned levels, it's very likely that you have qualified business income. Let's scroll down a bit to see how this worksheet works. I have set up a Schedule C for Sam Jones, who owns a retail grocery store. Let's say he has $10,000 of business income in terms of gross receipts. For simplicity, I won't enter any expenses on this Schedule C. This example is just to demonstrate how the qualified business income worksheet works....