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  • 1.  199A

    Silver Most Valuable Member
    Posted 03-05-2019 09:39 AM

    Hey Guys

    We have a statutory W-2  employee we report on Schedule C.  Is this a Trade or Business for 199A purposes? Does he get the 20% deduction???

    Any insight would be appreciated

    ​

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    Craig Wild
    Wild, Maney & Resnick, LLP
    Woodbury NY
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  • 2.  RE: 199A

    Platinum Most Valuable Member
    Posted 03-05-2019 09:48 AM
    Yes, statutory employees can take 199A, I recall a recent article in CPA Journal, JofA or Kiplingers tax letter
    where it was discussed,

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    Michael Jaffe
    CPA
    MICHAEL B. JAFFE, CPA PC
    Commack NY
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    Original Message


  • 3.  RE: 199A

    Silver Most Valuable Member
    Posted 03-06-2019 06:27 AM
    Payments reported on a W-2 to a statutory employee are not treated as wages.  They go on a Schedule C and are eligible for QBI 20% deduction, subject to the other limitations.

    IRS Notice 2018-64 states that monies paid to statutory employees are not wages for Section 199A in spite of the fact that those monies go on the W-2 because they are subject to FICA.

     

    In tax law, the statutory employee is an independent contractor under the common law rules, but is treated as an employee for FICA purposes. In this special category, someone such as a life insurance agent statutory employee operates a trade or business.


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    Larry Prosky CPA
    Prosky & Rosenfeld LLP CPAs
    1025 Old Country Road
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    Original Message


  • 4.  RE: 199A

    Posted 03-06-2019 03:25 PM
    Hi Craig,
    Reference J of A - January 2019, Statutory Employees and the QBI Deduction, Brian M. Dingman, CPA.

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    Harvey Fixman
    Harvey A. Fixman, CPA
    Woodbury NY
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    Original Message


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The opinions expressed are the views of the author alone and should not be attributed to any other individual or entity and shall not constitute an accounting opinion.