Answer:
a $22000
b $18700
Explanation:
a) Compute Evan's QBI deduction, assuming his overall taxable income before QBI is $125,000.
For single individual , if the taxable income is less than $157500, therefore the deduction will be lesser of:
20% of the taxable income
= 125000 × 20%
= [tex]125000 * \frac {20}{100}[/tex]
= $25000
20% of QBI will be : ( $110000 × 20% )
= [tex]111000 * \frac {20}{100}[/tex]
= $22000
b)
For singe individual, if the taxable income is greater than $157500 but less than 207500; then the deduction will be lesser with 50% of the wages.
50% of wages = 0
20% of the QBI is:
= [tex]\frac{165000-157500}{5000*(110000*0.2)}}[/tex] (where 20% = 0.2 for easy computation)
= 18700
20% of the taxable income
= (165000 × 20%)
=33000
