Pastor and QBI

[rtsietsema]

I'm looking for help in interpreting the QBI (aren't we all). But in this case it is a Pastor with income from the church and a housing allowance, both subject to SE taxes, as well as Schedule C income for various pastoral acts. I think the income from the Schedule C works for the QBI, but the program I use wiped it out by reducing that number by the 1/2 of the SE taxes (Which, of course, is a large number due to the income and housing). Does anyone think the QBI computation should be done by subtracting only the 1/2 SE taxes generated by the Schedule C income, or is my software correct in using 1/2 all of the SE taxes? Thanks for any input.

[KBTS]

This is how Drake handles it and I do not agree with them. It should only be 1/2 the SE tax from the Schedule C - other software companies are handling it that way. Drake says that since the IRS has not provided specific guidance on the matter, they are taking this approach. You can override the amount in Drake if you so desire.

[Burke]

I agree, since there has been info provided that clergy income from W-2 is not considered eligible for QBI. Therefore, the SE tax deduction for that income should not factor into the QBI calculation. In my software QBI worksheet, it is a free input field, so it does not have to be overridden.

[rtsietsema]

Thank you for the feedback. I am able to input what I believe to be proper treatment of the Scedule C income for QBI calculations in the program.