QBI Deduction

[taxlady2008]

I am so confused.  Is the W-2 wages the total wages for all the employees in the company or just the shareholder's W-2 wages?  If all W-2 wages are 500,000 and out of the $500,000, $100,000 of the W-2 wages were for the sole shareholder in an S corp, which W-2 wages are they referring to?  The total of $500,000 or just $100,000?  Do you need to make any adjustments for the Shareholders wages of $100,000?

[abctax55 · Accepted solution]

ALL wages are used in the QBID computation.   

[taxlady2008]

Thank you for your response.  Do I need to deduct the shareholds wages from the S corp from the QBI?

[abctax55]

Lacerte handles all of this quite well.... ARE you using Lacerte?

[itonewbie]

Agree with Anna.

For fundamental questions about what constitutes W-2 wages, you may like to refer to TD-Reg-107892-18 and Rev. Proc. 2019-11.

[taxlady2008]

I am using Lacerte.  On the Individual side, why isn't Lacerte deducting the shareholder wages from QBI?  I am not sure if I need to connect the W-2 wages to the activity or manually enter the wages to deduct from QBI.  Also, lacerte isn't deducting the 2% shareholders health insurance.