Loss of QBI deduction??

[Beersheba]

A high income contractor will have a significant QBI deduction, except for the fact that he has no W-2 wages. Even though he has no W-2 wages, he has significant sub-contractors to whom he has issued 1099s. Can he use any of the $$ from issuing 1099s as if they were W-2 wages??

All my research tells me this cannot be done.

Some of those of you that read this may conclude that he should have a payroll. I won't argue this, although most of the 1099s are for legitimate subcontractors who have their own businesses. My guess is there are some people who are paid weekly who should constitute a payroll. This may be true, but he won't do it, and since the IRS dings employees with deadlines and penalties, I almost don't blame him. He is independently wealthy and will shut down before he puts up with having to do a payroll. He is diligent about issuing 1099s, but if the State of Tennessee comes after him for Unemployment taxes, I wouldn't be able to defend him. Instead of getting into ethical issues with a potential payroll, I invite you to contemplate the question as posed in the first paragraph.

Thanks

[Anarchrist]

No
(the system won't let me post an answer with less than 10 characters, otherwise I'd have ended this after "No")

[BOB W]

What he saved in payroll taxes probably will exceed the benefit of QBI, until he gets audited. Maybe then QBI can be introduced as a partial offset to a large tax bill.

[Beersheba]

Good observation Bob W. Not to mention the misery of payroll deadlines, dings by the IRS,

[kathyc2]

I lost the 3,000 CTC. I would have it except for the fact that my kid has fur and 4 legs.