Question

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?

Homework Answers

Answer #1

A. Qualified Business Income(QBI):- This is the Net income earned over and above the expenses. This is the business profit which is being earned over an accounting period. To calculate the QBI following are not considered

1. Interest Income 2. Income Earned Outside USA 3. Capital gain or Losses 4. Dividends and 5.Certain payments made to partners and Shareholders.

B. Qualified Business Income Deduction:- To calculate the QBI deduction the certain income limits have been defined. The QBI deduction is available at the rate of 20% of the QBI to the self employed and small business owners.

Single Filer- The limit in 2020 is $ 1,63,300 as Total Income

Joint filers- The Limit in 2020 is $ 3,26,600 as Total Income.

Since Haley does not qualify the Single Filer Limit as mentioned above, his QBI deduction is 0(Zero).

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
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?
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?
55. Ashley (a single taxpayer) is the owner of ABC, LLC. The LLC (a sole proprietorship)...
55. Ashley (a single taxpayer) is the owner of ABC, LLC. The LLC (a sole proprietorship) reports QBI of $900,000 and is not a specified services business. ABC paid total W-2 wages of $300,000, and the total unadjusted basis of property held by ABC is $30,000. Ashley’s taxable income before the QBI deduction is $740,000 (this is also her modified taxable income). What is Ashley’s QBI deduction for 2019?
Margarita operates a sole proprietorship that earns$ 100,000 of qualified business income after deducting salaries of$...
Margarita operates a sole proprietorship that earns$ 100,000 of qualified business income after deducting salaries of$ 300,000. The sole proprietorship is not a specified service business. She files a single tax return for 2020. Assume her taxable income before the QBI deduction is$ 175,000. Margarita's QBI deduction for 2020 is: a. $-0-. b. $20,000. c. $35,000. d. $60,000. e. $80,000.
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...
Shelly reports $200,000 of QBI from her local jewelry store (a sole proprietorship). Shelly's proprietorship paid...
Shelly reports $200,000 of QBI from her local jewelry store (a sole proprietorship). Shelly's proprietorship paid $30,000 in W–2 wages and owns $20,000 of qualified property. Shelly’s spouse earned $74,000 of wages as an employee, they earned $20,000 of interest income during the year, and they will be filing jointly using the standard deduction. What is their QBI deduction for 2018?
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?
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,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT