What type of deduction is the Section 199A qualified business income (QBI) deduction?
Added by Todd R.
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This section of the Internal Revenue Code was introduced by the Tax Cuts and Jobs Act of 2017 and provides a deduction for certain types of income. Show more…
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Leonard and Penny own an accounting firm as a sole proprietorship. They are cash basis, calendar-year taxpayers and file a joint return. For the year, they had the following information: Ordinary income from sole proprietorship $425,000 Taxable income $500,000 Modified taxable income $415,000 W-2 wages paid to employees $90,000 Qualified property basis $30,000 SE tax deduction $13,658 SE health insurance deduction $22,000 Qualified retirement plan contributions $18,000 What is their QBI deduction? $45,000 $77,868 $0 $74,268
Akash M.
Evan, a single individual, operates a service business that earned $110,000 in 2018. The business has no tangible property and paid no W-2 wages. a. Compute Evan's QBI deduction, assuming his overall taxable income before QBI is $125,000. b. Compute Evan's QBI deduction, assuming his overall taxable income before QBI is $165,000.
After applying all the limitations, Jack has a QBI (Qualified Business Income) component of $1,500 for one business and $2,000 for the second business. He also had REIT (Real Estate Investment Trust) dividends of $150. What is his combined QBI deduction before the ordinary taxable income limitation?
Madhur L.
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