Last year, we had one employee (also a shareholder) that receives W-2 wages. There are two shareholders in the S-Corp, and we are filing our 1120S using TurboTax Business.
On the Statement A - QBI Pass-through Entity Reporting (on the K-1s), TurboTax is splitting the "W-2 Wages" among each of the Shareholders based on their shareholder %s. Shouldn't 100% of the "W-2 Wages" be paid to the employee/shareholder that was paid the wages on their W-2?
NOTE: we are not using TurboTax to file our W-2s, we are using our payroll processor...so TurboTax doesn't know which employees are paid W-2 wages.
How do I correct this? Thank you in advance!
TurboTax is correct in splitting wages proportionately to the shareholding percentage. The amount of wages reported on Schedule K-1 is used to calculate the QBI deduction for each shareholder. It represents the percentage of wages allocated to the shareholder, no matter who actually received the wages.
TurboTax is correct in splitting wages proportionately to the shareholding percentage. The amount of wages reported on Schedule K-1 is used to calculate the QBI deduction for each shareholder. It represents the percentage of wages allocated to the shareholder, no matter who actually received the wages.