33 Through November, Cameron has received gross income of $129,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,340 of revenue at a cost to Cameron of $3,900, which is deductible for AGI. In contrast, engagement 2 will generate $6,800 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement Engagement 1 Engagement 2 $ 129,000 $ 129,000 (2) Income from engagement 9,340 9,340 (3) Additional for AGI deduction 3,900 3,900 (4) Adjusted gross income $ 134,440 $ 135,800 (5) Greater of itemized deductions or standard deduction (6) Deduction for QBI Taxable income 0 1,360 $ 134,440 $ 134,440

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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33
Through November, Cameron has received gross income of $129,000. For December, Cameron is considering whether to accept one
more work engagement for the year. Engagement 1 will generate $9,340 of revenue at a cost to Cameron of $3,900, which is
deductible for AGI. In contrast, engagement 2 will generate $6,800 of qualified business income (QBI), which is eligible for the 20
percent QBI deduction. Cameron files as a single taxpayer.
Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has
no itemized deductions.
Description
(1) Gross income before new work engagement
Engagement 1
Engagement 2
$
129,000
$
129,000
(2) Income from engagement
9,340
9,340
(3) Additional for AGI deduction
3,900
3,900
(4) Adjusted gross income
$
134,440 $
135,800
(5) Greater of itemized deductions or standard deduction
(6) Deduction for QBI
Taxable income
0
1,360
$
134,440 $
134,440
Transcribed Image Text:33 Through November, Cameron has received gross income of $129,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,340 of revenue at a cost to Cameron of $3,900, which is deductible for AGI. In contrast, engagement 2 will generate $6,800 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement Engagement 1 Engagement 2 $ 129,000 $ 129,000 (2) Income from engagement 9,340 9,340 (3) Additional for AGI deduction 3,900 3,900 (4) Adjusted gross income $ 134,440 $ 135,800 (5) Greater of itemized deductions or standard deduction (6) Deduction for QBI Taxable income 0 1,360 $ 134,440 $ 134,440
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