Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Can I take the QBI 20% tax deduction on the following scenario:

Highlighted
Level 1
last updated ‎December 07, 2019 12:39 AM

Taxpayer is a Disney Travel consultant working through a travel agency and receives commissions only on a 1099-MISC. Would her Schedule C income qualify for the QBI  20%deduction or would she actually be considered an employee and not qualify for the deduction? She doesn't physically work at the agency and receives no W-2, just the commissions. 

Labels (1)
0 Cheers
1 Solution

Accepted Solutions
Highlighted
Level 15
last updated ‎December 07, 2019 12:39 AM

The fact that she receives a 1099-MISC means she is not a common law employee of the payer (assuming there is no misclassification of the status).  You still need to evaluate whether her activities rise to the level of §162 trade or business and, therefore, whether to report the income on Sch C or Line 21.  If it is a Sch C business, the income should be eligible for QBI so long as all the other conditions are met.

---------------------------------------------------------------------------------
Still an AllStar

View solution in original post

0 Cheers
1 Reply 1
Highlighted
Level 15
last updated ‎December 07, 2019 12:39 AM

The fact that she receives a 1099-MISC means she is not a common law employee of the payer (assuming there is no misclassification of the status).  You still need to evaluate whether her activities rise to the level of §162 trade or business and, therefore, whether to report the income on Sch C or Line 21.  If it is a Sch C business, the income should be eligible for QBI so long as all the other conditions are met.

---------------------------------------------------------------------------------
Still an AllStar

View solution in original post

0 Cheers