Is there a phase out for regular (non-SSTB) businesses when it comes to the QBI deduction? 2021 is a bit of a strange year because many businesses are experiencing a huge increase in profits as they receive employee retention credits, etc. I know there is a phase out for SSTB businesses, but I just want to be reassured that if businesses have a large uptick in profits in 2021, that their QBI deduction won't phase out to $0.
Let me just throw out a hypothetical. Let's say you have an S-Corp (or LLC) with $3M in revenue in 2021, $1.4M in W-2 wages to non-owner employees, $100K to the owner's W-2, $400K in employee retention credits . . . that all results in a 40% profit of $1.2M for the year.
Is this S-Corp/LLC owner going to still get a QBI deduction on their tax return? Or does it phase out? Can you share a sample calculation for a "high profit" year? You can use my numbers above or other numbers.
Thanks.
