lweinzapfel
Level 3
This widget could not be displayed.

I'm working on an individual return, and found something strange. Each of my taxpayers receive an s-corp K-1 from a management company they own. The QBI statement from that k-1 shows multiple passthrough entities. Lacerte is increasing the QBI for each of the passthrough entities that are entered in Line 17 - Other Information for the s-corp K-1s. In the worksheets of the return,  the exact description is "Allocated deduction for one-half of self-employment tax".  I cannot figure out why Lacerte would be adding this back. The taxpayer does have a deduction for 1/2 SE tax on their Schedule 1, but it is properly being deducted from the appropriate QBI item. The only thing I can think of that might be related to this, is the taxpayers each receive a W-2 from the s-corp. But I still can't figure out why Lacerte would increase QBI for 1/2 SE deduction.. Has anyone ran into this before?

Labels (1)
0 Cheers
George4Tacks
Level 15
This widget could not be displayed.

Did you enter the "Allocated deduction for one-half of self-employment tax" as a negative number? 

 


ex-AllStar
0 Cheers
lweinzapfel
Level 3
This widget could not be displayed.

No, I didn't enter anything for SE tax. Lacerte is automatically calculating it based on my Schedule C and a partnership K-1 that the taxpayer received that showed SE income. The deduction for 1/2 SE tax shown on Schedule 1 matches the QBI reduction for the Sch C QBI and the partnership K-1 QBI. It's so strange that an S-Corp K-1 is showing a QBI increase for 1/2 SE tax...

0 Cheers