Question

Tammy, a single taxpayer, has a part-time job at BigCo, a company in which she has...

Tammy, a single taxpayer, has a part-time job at BigCo, a company in which she has no ownership interest. In addition, she owns and operates LittleCo, a sole proprietorship that is a qualified trade or business. Tammy is paid wages of $40,000 by BigCo, and reports $100,000 in qualified business income from LittleCo. She has no other items of income or loss and $25,000 of itemized deductions.

What is her qualified business income deduction?

Homework Answers

Answer #1

Section 199A of the Internal Revenue Code provides many taxpayers a deduction for qualified business income from a qualified trade or business operated directly or through a pass-through entity.  Individuals, trusts and estates with qualified business income, qualified REIT dividends or qualified PTP income may qualify for the deduction. QBI is the net amount of qualified items of income, gain, deduction and loss from any qualified trade or business. The deduction shall be % of QBI.

Accorsingly, Tammy shall get deduction of 20% of $ 100,000 = $ 20,000

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Jansen, a single taxpayer, owns and operates a restaurant (as a sole proprietorship). The business is...
Jansen, a single taxpayer, owns and operates a restaurant (as a sole proprietorship). The business is not a specified services business. In 2019, the business pays $125,000 in W-2 wages, has $187,500 of qualified property, and $437,500 in net income (all of which is qualified business income). Jansen has no other items of income or loss and will take the standard deduction. What is Jansen’s qualified business income deduction under Section 199A?
Haley, a single taxpayer, owns and operates a Cafe (as a sole proprietorship). The business is...
Haley, a single taxpayer, owns and operates a Cafe (as a sole proprietorship). The business is not a specified services business. In 2019, the business pays $60,000 in W-2 wages, has $150,000 of qualified property, and $200,000 in net income (all of which is qualified business income). Haley also has a part-time job earning wages of $11,000, receives $3,200 of interest income, and will take the standard deduction. What is Haley’s qualified business income deduction?
Susan, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is...
Susan, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not a specified services business. In 2019, the business pays $60,000 in W-2 wages, has $150,000 of qualified property, and $200,000 in net income (all of which is qualified business income). Susan also has a part-time job earning wages of $11,000, receives $3,000 of interest income, and will take the standard deduction of $12,000. What is Susan’s qualified business income deduction?
Susan, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is...
Susan, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not a specified services business. In 2020, the business pays $60,000 in W-2 wages, has $150,000 of qualified property, and $200,000 in net income (all of which is qualified business income). Susan also has a part-time job earning wages of $13,600, receives $3,400 of interest income, and will take the standard deduction. What is Susan’s qualified business income deduction? Please show all steps, thank...
Susa, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is...
Susa, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not a specified services business. In 2020 the business pays $60,000 in W2 wages, has $150,000 of qualified property, and $200,000 in net income (all of which is qualified business income) Susan also has a part-time job earning wages of $13,600, receives $3,400 of interest income, and will take the standard deduction. What is Susan qualified business income dedcution?
Thad, a single taxpayer, reports taxable income before the QBI deduction of $188,000. Thad, a CPA,...
Thad, a single taxpayer, reports taxable income before the QBI deduction of $188,000. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During the 2019 tax year, his proprietorship generates qualified business income of $150,400 after deducting self-employment taxes, W–2 wages of $112,800, and $8,400 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to two decimal places. Round your...
Exercise 15-17 (Algorithmic) (LO. 3, 4) Thad, a single taxpayer, reports taxable income before the QBI...
Exercise 15-17 (Algorithmic) (LO. 3, 4) Thad, a single taxpayer, reports taxable income before the QBI deduction of $171,500. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During the tax year, his proprietorship generates qualified business income of $137,200 after deducting self-employment taxes, W–2 wages of $102,900, and $8,800 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to...
Jason and Paula are married. They file a joint return for 2019 on which they report...
Jason and Paula are married. They file a joint return for 2019 on which they report taxable income before the QBI deduction of $297,000. Jason operates a sole proprietorship, and Paula is a partner in the PQRS Partnership. Both are a qualified trade or business, and neither is a specified services business. Jason's sole proprietorship reports $188,800 of qualified business income, reports W–2 wages of $47,600, and owns qualified property of $21,500. Paula's partnership reports a loss for the year,...
2. Jason and Paula are married. They file a joint return for 2020 on which they...
2. Jason and Paula are married. They file a joint return for 2020 on which they report taxable income before the QBI deduction of $200,000. Jason operates a sole proprietorship, and Paula is a partner in the PQRS Partnership. Both are a qualified trade or business and neither is a specified services business. Jason’s sole proprietorship reports $150,000 of net income, W-2 wages of $45,000, and has qualified property of $50,000. Paula’s partnership reports a loss for the year, and...
Joan, a single taxpayer filing as head of household, operates a local candy store as a...
Joan, a single taxpayer filing as head of household, operates a local candy store as a sole proprietorship. The business has two (2) employees, one who earned $40,000 and another who earned $60,000 in 2020. The business had no significant assets during the year. Joan’s “modified taxable income” for 2020 was $155,000 and she reported $195,000 of net business income on Schedule C of her IRS Form 1040. a. Calculate Joan’s qualified business income tax deduction for 2020? (3 points)...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT