Form 8995 is the "Qualified Business Income Deduction Simplified Computation" form used to claim the qualified business income (QBI) deduction on 2023 tax returns.

The QBI deduction, also known as the Section 199A deduction, allows eligible taxpayers to deduct up to 20% of their qualified business income from a pass-through business.

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Taxpayers with 2023 taxable income below $182,100 ($364,200 for married filing jointly) can use the simplified Form 8995 to calculate their QBI deduction.

Those with 2023 taxable income above the thresholds must use the more complex Form 8995-A to calculate their deduction.

Form 8995 must be attached to the taxpayer's 2023 tax return, such as Form 1040 or 1040-SR, to claim the QBI deduction.

The QBI deduction phases out for specified service trade or business (SSTB) owners with taxable incomes between $182,100-$232,100 ($364,200-$464,200 for joint filers) in 2023.

Qualified business income includes net income from sole proprietorships, partnerships, S corporations, and certain trusts and estates, but excludes W-2 wages and certain investment income.

Taxpayers must have qualified business income, qualified real estate investment trust (REIT) dividends, or qualified publicly traded partnership (PTP) income to claim the deduction.

The QBI deduction is limited to the lesser of 20% of the taxpayer's QBI or 20% of the taxpayer's taxable income minus net capital gains.

Patrons of agricultural or horticultural cooperatives must use Form 8995-A instead of Form 8995 to calculate their QBI deduction.

Form 8995 simplifies the QBI deduction calculation by allowing taxpayers to use a flat 20% deduction rate, rather than having to calculate the deduction based on the business's W-2 wages and qualified property.

The QBI deduction was introduced as part of the 2017 Tax Cuts and Jobs Act and is scheduled to expire after 2025 unless extended by Congress.