SEP-IRA for spouse to qualify for QBI - is it possible?

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Topic Author
azurik
Posts: 56
Joined: Wed May 22, 2013 11:19 am
Location: Boston, MA

SEP-IRA for spouse to qualify for QBI - is it possible?

Post by azurik »

Hi Bogleheads,

Here's my situation:

Me: Corporate W-2 job with $200k salary and a single-member LLC with estimated ~$400k net income this year.
Spouse: No W-2 or 1099 earnings.
Total Income: ~$600k

I'm trying to qualify for the Qualified Business Income tax deduction. In order to receive the full benefits of QBI, I need to reduce our married filing jointly AGI to $329,800.

I'm just about there by maximizing my own SEP-IRA contributions, front-loading some costs, and prepaying business expenses I anticipate to have in 2022. However, I'm still short by $40k-$50k.

One option I read about seems to imply that the LLC can make a SEP-IRA contribution to one's spouse as long as he/she is working for the company. I don't mind paying my wife for services that she can render, but is it even possible for a single-member LLC to do this? Or is this option only available to LLC partnerships or S-Corps that pays W-2 wages?
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