QBI deductions - contributions to qualified retirement plan

[taxlady2008]

We are required to deduct from QBI by contributions to qualified retirement plan.  Is this just for the shareholder?  If so, is it only the company match portion of the 401K or the amount the shareholder contributed to the 401K or both.  I believe it is just for the shareholder portion.  I wouldn't think it would be the entire company match that I need to deduct.  Does anyone know? 

[sjrcpa]

K-1 Line 1 is already reduced by the Company contribution.

Shareholder/employee deferral is part of their W-2 wages.

What are you trying to reduce?

[taxlady2008]

Thank you for responding.  According to Reg 1.99A-3(b)(1)(vi), you are supposed to reduce from QBI the deductible portion of SE tax, the self employed health insurance deduction, and the deduction for contributions to a qualified retirement plan.    I am confused on how to deduct the 401K contribution.  Do I just deduct the match for the 100% shareholder (S Corp) or his contribution and the companies match? Or do I deduct the company match for all employees.  The instructions are so vague.

[sjrcpa]

If you're preparing a 1040 with no SE income just use the 199A amounts from the 1120S K-1.

[sjrcpa]

If you're preparing the 1120S and the entire business is Qualified, the software will do the 199A calculation for the K1s.

[taxlady2008]

Yes, but we are supposed to reduce the K-1 income by the health insurance and 401K amounts.  I know where to enter the health insurance amount but I am not sure how to calculate the 401K amount to adjust for QBI.  The software doesnt know and the K-1 wont have the 401K amounts.  This is for a 1040 using the 1120s K-1.

[sjrcpa]

"just use the 199A amounts from the 1120S K-1."

They have already been reduced by 401(k) deductions.