DPD - more then 1 Sch. C

[BOB W]

If the software is doing all Schedule c's you need to take into account all Cs when developing your percentage of qualifying DPD.

If all fails, verify you have the correct spouse on each Schedule C. And the correct spouse on the 8903.

[Gretel]

Td 9263

I don't know if anyone has the time to look at pg. 88/89 - does this indicate that ALL income on a tax return (other than wages) needs to be taken into account? That would support what my software is doing. I submitted my question to NATP but it will take some days to get a response. Thanks

https://www.treasury.gov/press-center/press-releases/Documents/td9263.pdf

[Gretel]

If you are getting the same DPAD your software is, I would trust that. When entering amounts for lines 1 and 4 on F-8903, you should only use the income and COGS for the Schedule C business that qualifies for the DPAD.

Line 1 is not an issue, line 4 is automatically calculated after I enter the qualifying COGS amount in a worksheet. The % my software is using for COGS & indirect expenses is arrived from qualifying income divided by ALL business income, not just the Schedule C business that qualifies for the DPAD. This is what threw me off. I just tried to understand the thinking of my software. If only the Schedule C business that qualifies for the DPAD should be used, my software is wrong.

[Roland Slugg]

If you are getting the same DPAD your software is, I would trust that. When entering amounts for lines 1 and 4 on F-8903, you should only use the income and COGS for the Schedule C business that qualifies for the DPAD.

[Gretel]

OK, I went through all the posts on TTB and consulted the instructions for form 8903. TP & Spouse both have Sch. C activities but only one has DPD qualifying income and can use the small business simplified overall method. W-2 or income limitation do not apply, there is enough of either. Here is were I get lost: I enter the correct $$ for income & COGS based on the income % for the qualifying entity. Proseries then does the calculation for indirect expenses, which somehow includes all Schedule C activity and I cannot figure out exactly how the calculation is done. Any help?

If I apply my numbers/% to all Schedule C activities I match my software numbers so I assume this is how it needs to be done?