Hi, All!
Am I overthinking this?
When preparing the K1 for an S-Corp, where the shareholder/officer has reimbursed health insurance premiums. QBI is clearly reduced by the health insurance expense. However, should W2 wages for purposes of the 199A calculation be reduced on the K1, line 17, code W?
For example:
S Corporation has taxable income of $50,000 (which includes deductions for $5,000 of officer health insurance). Corporation paid $75,000 in W2 wages BEFORE adding the $5000 to the officer's W2.
So, the W3 shows federal wages of $80,000 but Social security wages of $75,000.
For the K1:
QBI on line 17, code V is $50,000.
W2 wages, line 16, is code W is $80K or $75K?
Thanks for any thoughts on this.