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Robin Byrd is a self-employed accountant with Schedule C profit of $320,000. Her business does not...

Robin Byrd is a self-employed accountant with Schedule C profit of $320,000. Her business does not pay any W-2 wages. Robin is married filing a joint return and has taxable income of $275,000, prior to the Section 199A deduction. What is the amount of Robin's qualified business income deduction, if any?

A.

$0
B.

$55,000
C.

$64,000
D.

$100,000
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Answer #1

Since the taxable income is less than $321400 (Lower threshold for married filing joint return); any income from either qualified trade or business or specified trade or business will be eligible for 20% qualified business income deduction. Qualified Business Income deduction is the amount which needs to be deducted to arrive at taxpayer's taxable income.

The Qualified business income for a sole proprietor is the profit or loss from the business as reported on Schedule C of form 1040.

Qualified Business Income= $320,000

20% of Qualified business income= 20% of 320000

$64,000

The correct answer is (c)- $64,000

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