S CORP PAID HEALTH INSURANCE TO REDUCE QBI

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Is there a check box to reduce qbi by S corp health insurance paid by the corp? Proseries is not reducing qbi? And where would I find it?.

ProSeries Professional

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T

TaxGuyBillAnswer

If I remember correctly, go to the K-1 worksheet and look below the 'normal' K-1 boxes. There are a million various worksheets, etc and some of them deal with QBI. Somewhere in that mess you would enter the amount.

With that being said, although the IRS says to reduce QBI, it is illogical because it is essentially double-deducting it and therefore could potentially be open to court cases.

T

Terry53029

Intuit Community Champion

QBI is not reduced for health insurance directly on the 1120S (the s-corp QBI is computed use net profit). If the Owner takes a deduction on his/her 1040 then the QBI is reduced on the 1040 by the deduction amount taken

J

jgcpaAuthor

Level 5

Hi Terry,

The owner did take a deduction for the S corp health insurance on Sch 1 (1040). The Qbi should also be reduced per the IRS ( see Q/A39 ) by the deduction to avoid double dipping. How do I do this? Is there a check box?

A39. Generally, the self-employed health insurance deduction under section 162(l) is considered attributable to a trade or business for purposes of section 199A and will be a deduction in determining QBI. This may result in QBI being reduced at both the entity and the shareholder level.

T

TaxGuyBillAnswer

If I remember correctly, go to the K-1 worksheet and look below the 'normal' K-1 boxes. There are a million various worksheets, etc and some of them deal with QBI. Somewhere in that mess you would enter the amount.

With that being said, although the IRS says to reduce QBI, it is illogical because it is essentially double-deducting it and therefore could potentially be open to court cases.

A39. Generally, the self-employed health insurance deduction under section 162(l) is considered attributable to a trade or business for purposes of section 199A and will be a deduction in determining QBI. This may result in QBI being reduced at both the entity and the shareholder level.

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