I have a question about K-1 and shareholder wages paid

[howard1]

why are the wages paid to one shareholder being allocated to another shareholder's K-1 form?

[DanielV01 · Accepted solution]

This is for the QBI calculation.  These wages are not reported on your return as taxable to you.  Only your W-2 wages and the appropriate income amounts reported on your K-1 will be taxed on your return.  But part of the QBI deduction calculation involves knowing how many wages the business paid everyone, and not just you.  Actually, a high number in that box is a good thing for the QBI deduction calculation, especially if your income is above the phase-out threshold ranges.

The QBI calculation is very complex.  To help understand it a little better, the following FAQ may help you.  Please click on See the Entire Answer and the embedded link How is the deduction calculated? (Not for the faint of heart):  https://ttlc.intuit.com/replies/7019998