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  • QBI

    I couldn't figure out my QBI/1099A so i will just ask my questions.

    Is the QBI equal to line 21 on 1120S or 1040 line 17? I cannot figure out how exactly to calculate QBI? I am a single owner S corp in the service business. Total income 420 - 100,000 W2 salary -25 K deduction/expenses - 25 K 401K gets a QBI around 270. Is this correct or are 401k, owner salary, expenses excluded?

    I will come in between 315- 415 range close to 400 but plan on changing my employer match of 19k to traditional to get more of the 1099A deduction. Does this make sense?

    Last question is since my taxable income will be above 315 am i subject to QBI * 0.20 v half of W2 or just the QBI?

    Thanks,

    Travis

     

     

     

  • #2
    I do not recommend anyone file a manual return for 2019. Use tax software on or after 3/1 with the latest updates verifying full support the QBI deduction.

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    • #3
      Your w2 is not part of your qbi but it is part of your taxable income that could limit your QBI deduction.


      https://www.physicianonfire.com/tax-reform-physicians/

      Comment


      • #4
        Per review of my filed turbo tax with the worksheets:

        My QBI = schedule c net profit - half of self employment tax - i401k traditional contributions

        My QBI deduction = (AGI - itemized deductions - net capital gains) * 20%

        Since My QBI * 20% was more than (taxable income before QBI deduction)* 20%, my QBI deduction was not determined directly by my QBI.

        All this is done on worksheets not filed and then listed on 1040 line 9.

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        • #5
          The more I read about QBI, the more confused I get.

           

          Explain this to me using simple numbers:

          W2 Income: $500,000

          1099 Income as a per diem doctor: $100,000

          Max 403b contribution

          Single filer

           

          Do you get QBI or not?

           

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          • #6
            You are an SSTB subject to the $157.5K - $207.5 taxable income phaseout. Not even close to being able to qualify for the QBI deduction.

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            • #7
              Has anyone filed a TurboTax S-Corp 2% shareholder-employee QBI qualified return with a traditional employee deferral? Is the W-2 employee deferral deducted from the distribution to determine the QBI?

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              • #8




                You are an SSTB subject to the $157.5K – $207.5 taxable income phaseout. Not even close to being able to qualify for the QBI deduction.
                Click to expand...


                what is sstb?

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                • #9







                  You are an SSTB subject to the $157.5K – $207.5 taxable income phaseout. Not even close to being able to qualify for the QBI deduction.
                  Click to expand…


                  what is sstb?
                  Click to expand...


                  Specified Service Trade or Business (SSTB) and doctors, lawyers etc fall under that category and unless your income falls under the 157.5 for Single Filing or 315K MFJ, your can not claim the QBI deduction.

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                  • #10
                    What if instead I made 100k in 1099 income selling wingding or through real estate investing. With a 500k wW2 income just for arguments sake, could I get QBI?

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                    • #11
                      If you are not an SSTB, you are not subject to the taxable income QBI phase-out, but you are subject to the taxable income QBI phase-in of the limitation on the greater of:

                      • Your share of 50% of the W-2 wages with respect to the qualified trade or business, or

                      • The sum of your share of 25% of the W-2 wages with respect to the qualified trade or business, plus 2.5% of the UBIA of qualified property.


                      If you do not have an SSTB and your taxable income is > $207.5K/$415K S/MFJ, you will need to create an S-Corp and be subject to the above limitations. As a sole proprietor you do not have any W-2 wages unless you have W-2 employees.

                      The QBI deduction is a real mess for non-SSTBs with no W-2 employees and taxable income in the phase-out/phase-in range, especially with variable taxable income. You can not just switch back and forth between a sole proprietorship and an S-Corp at will.

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                      • #12


                        What if instead I made 100k in 1099 income selling wingding or through real estate investing. With a 500k wW2 income just for arguments sake, could I get QBI?
                        Click to expand...


                        You unintentionally asked a complicated question. Selling wingding as a business, then yes. Real estate has to "rise to the level of a trade or business." Having a rental property or two that is managed by a property manager may not count.

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                        • #13
                          “rise to the level of a trade or business"

                           

                          This is exactly my question, does anyone actually know what this means yet?

                           

                           

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                          • #14
                            I think Johanna posted an excellent article from kitces on this as it pertains to real estate, reading through this helped me.

                            https://www.kitces.com/blog/real-estate-aggregation-section-199a-qbi-deduction-rules/

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