It's been suggested by a bogleheads poster who is usually very well informed that perhaps elective solo 401(k) deferrals would not reduce QBI. I think that user would be the first to admit that this is simply a question he/she still has, and not a position he/she is taking, but the basic idea is that the phrasing of the regulations, which states:
the deduction for contributions to qualified retirement plans under section 404 are considered attributable to a trade or business to the extent that the individual’s gross income from the trade or business is taken into account in calculating the allowable deduction, on a proportionate basis.
This seems much more applicable to the percentage based profit sharing contribution than to the straight dollar limit employee salary deferral contribution, which is only proportionate to income to the extent that their must be enough income to support the contribution.
I wonder what you think of this suggestion @SeattleCPA?
So I answered or addressed this exact point in the comment thread from Harry Sit (who blogs as the finance buff) at that blog post... and I think the way you read the final reg is
not that you adjust for pension fund amounts if deduction amounts take into account the income from the trade or business AND the amounts are proportional.
Rather, you adjust if deduction amounts take into account the income from the trade or business.
So what the does the reference to proportionate basis mean in that case? It addresses the situation where some deduction like SE taxes, SE health insurance, retirement plan, etc., take into account several businesses. And in that case, you need to proportionally allocate.
Extreme example to illustrate: Someone earns $200K in guaranteed payments from partnership #1 (which BTW are not QBI and so don't generate a Section 199A deduction), earns $200K in sole proprietorship that runs a little retail shop (so is QBI and should generate a Section 199A deduction), and then also earns $200K from being a partner in a law firm (which could be QBI and so could generate a Section 199A deduction except for the fact that law firm is a specified service trade or business).
What the "proportionate basis" language means is you'd allocate something like a (say) $15K SE tax deduction, a $30K self-employed health insurance deduction and a $60K pension fund contribution (that combines say both elective deferral and profit sharing) on a proportionate basis.
Applying the "extreme example" numbers, and assuming W-2 wages and depreciable property don't matter, the QBI in the example would be the $200K from the sole proprietorship minus $5K of SE taxes, $10K of SE health insurance and $20K of pension. That would leave $165K of adjusted QBI and produce a $33K Section 199A deduction.
One other way to get a handle on this... Think about how the bogleheads approach applies to SE health insurance. The SE health insurance deduction is not proportional. Does that mean it doesn't adjust QBI? (Clearly it does and the final regs explicitly state so.)