@KimCo11 wrote:
Hi, thanks for your reply. I'm referring to Statement A (QBI Pass-through Entity Reporting), third line from the bottom (W-2 Wages). I'm a W-2 employee shareholder (51%) and he is a silent shareholder (49%). I earned $1,400 W-2 wages in 2020 and he earned none. For this reason, I expected my K-1 to show $1,400 W-2 wages and his to show $0. Instead, my K-1 shows $714 W-2 wages and his shows $686. I understand profits/losses are passed through, but wages too?
That is based on how much wages the COMPANY paid, for purposes of the Qualified Business Income (QBI) deduction. That does not add taxable income to your personal return when you enter the K-1. It has nothing to do with how much your specific wages were, it is based on the TOTAL wages for ALL employees of the corporation.
As was mentioned, your wages should be on your W-2.
