Question

Huy is single, age 40, and operates a sole proprietorship. In 2020, Huy's sole proprietorship generated...

Huy is single, age 40, and operates a sole proprietorship.

In 2020, Huy's sole proprietorship generated income of $200,000, and the deductible business expenses totaled $120,000. Huy also had other gross income of $40,000.

Huy takes the standard deduction.

What is Huy's 2020 taxable income?

Which of the following is most accurate?

Group of answer choices

The QBI deduction is a tax credit, and Huy does not qualify because it only applies to C corporations

The QBI deduction is taken before calculating AGI, similar to an adjustment

In addition to paying federal income tax on his taxable income, Huy must pay self-employment taxes

The QBI deduction is included in gross income

The QBI deduction is an itemized deduction; Huy would only utilize the QBI deduction if he doesn't take the standard deduction

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