A. Taxpayers with incomes below an annual threshold amount of taxable income will compute their deduction without taking the W-2 wages and depreciable assets computation into account.
B. The provisions of Section 199A are subject to a sunset provision & will expire after the 2025 tax year unless Congress takes action to extend the provisions or make them permanent
C. Most states will recognize the Section 199A deduction for state income tax purposes, as state tax computations generally start with federal taxable income
D. The deduction cannot exceed 20% of ordinary taxable income
Answer:- D The deduction cannot exceed 20% of ordinary taxable income
Section 199A deduction equals the lesser of:
(i) 20 percent of the QBI (generally defined as the net amount of
qualified items of income, gain, deduction, and loss with respect
to a qualified trade or business of the taxpayer) from the
individual's trades or businesses plus 20 percent of the
individual's combined qualified REIT dividends and qualified PTP
income
OR
(ii) 20 percent of the excess (if any) of the individual's taxable
income over the individual's net capital gain.
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