Kyra, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not a "specified services" business. In 2022, the business pays $60,000 of W–2 wages, has $150,000 of qualified property, and generates $200,000 of qualified business income. Kyra also has a part-time job earning wages of $11,500 and receives $3,450 of interest income. Her standard deduction is $12,950. Assume the QBI amount is net of the self-employment tax deduction. What is Kyra's tentative QBI based on the W–2 Wages/Capital Investment Limit? Determine Kyra's allowable QBI deduction.
Kyra, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not a "specified services" business. In 2022, the business pays $60,000 of W–2 wages, has $150,000 of qualified property, and generates $200,000 of qualified business income. Kyra also has a part-time job earning wages of $11,500 and receives $3,450 of interest income. Her standard deduction is $12,950.
Assume the QBI amount is net of the self-employment tax deduction.
What is Kyra's tentative QBI based on the W–2 Wages/Capital Investment Limit?
Determine Kyra's allowable QBI deduction.
Qualified Business Income:
Qualified business income is the income from qualified trade or business including any partnership firm, sole proprietorship, or any certain trust. It is used to calculate the tax liability of the taxpayer.
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