John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter, Samantha. John also does some Web design work on the side and reported revenues of $4,000 and associated expenses of $750. Can they use the qualified business income deduction? If so, how much?
The qualified business income deduction allows eligible self-employed and small-business owners to deduct up to 20% of their qualified business income on their taxes.
In general, if your total taxable income in 2020 was under $163,300 for single filers or $326,600 for joint filers, you may qualify to claim the deduction .
Here the total taxable income = $ 4,000
So, we can claim 20% of taxable income which is $ 800 and he associated with an expenses of $ 750 . so he can deduct that expenses .
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