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ebayer
New Member

We are an S Corp and using the PA state version of TT Business, why are our W-2 wages an average of our 3 different wages in Section 17 of the K-1?

 
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DanielV01
Expert Alumni

We are an S Corp and using the PA state version of TT Business, why are our W-2 wages an average of our 3 different wages in Section 17 of the K-1?

The amount you are referring to is probably appearing in Box 17 with a code of W.  That is correct reporting.  Box 17 does not increase or decrease your taxable income, but is a factor in determining how much of your income qualifies for the Section 199A (QBI) deduction.  Even if all three shareholders receive different salaries, you each are entitled to the same distributive share of QBI-qualifying wages.  A larger number in this box is a good thing; it can only help you to get the full deduction, it cannot and does not add to your tax.

The QBI calculation is complex, especially if you are over the phase-out threshholds of $157,500 for a single filer, married filing separately or a head of household; and $315,000 if married filing joint or a qualifying widow/widower.  But this FAQ explains in more detail  (click on the View the entire answer, and then the embedded link  How is the deduction calculated? (Not for the faint of heart!):  https://ttlc.intuit.com/replies/7019998 

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