What are wages for the qualified business income (QBI) deduction?
W-2 wages generally include amounts paid to employees for the performance of services, plus elective deferrals (for example, contributions to 401(k) plans), deferred compensation, and Roth IRA contributions. Amounts paid to statutory employees when the "Statutory Employee" box in Box 13 is checked are not W-2 wages. Don't include deductible tips in wages.
If you conduct more than one trade or business, the W-2 wages must be allocated among the various trades or businesses to the business that generated the wage. In addition, only the W-2 wages properly allocable to QBI are includible. W-2 wages are properly allocable to QBI if the associated wage expense is taken into account in computing QBI.
Before allocating W-2 wages among various trades or businesses and/or allocating W-2 wages to QBI, you'll first need to determine the total amount of W-2 wages. See Form 8995-A instructions for more information on methods to figure out your W-2 wages.
If you conduct more than one trade or business, the W-2 wages must be allocated among the various trades or businesses to the business that generated the wage. In addition, only the W-2 wages properly allocable to QBI are includible. W-2 wages are properly allocable to QBI if the associated wage expense is taken into account in computing QBI.
Before allocating W-2 wages among various trades or businesses and/or allocating W-2 wages to QBI, you'll first need to determine the total amount of W-2 wages. See Form 8995-A instructions for more information on methods to figure out your W-2 wages.
