Problem 9-45 (LO. 6) Scott and Laura are married and will file a joint tax return. Scott has a sole proprietorship (not a "specified services" business) that generates qualified business income of $300,000. The proprietorship pays W-2 wages of $40,000 and holds qualified property with an unadjusted basis of $10,000. Laura is employed by a local school district. Their taxable income before the QBI deduction is $386,600 (this is also their modified taxable income). a. Determine Scott and Laura's QBI deduction, taxable income, and tax liability for 2020. QBI deduction $ 20,000 Taxable income $ 346,600 Tax liability 72,943 b. After providing you with the original information in the problem, Scott finds out that he will be receiving a $6,000 bonus in December 2020 (increasing their taxable income before the QBI deduction by this amount). Redetermine Scott and Laura's QBI deduction, taxable income, and tax liability for 2020. QBI deduction $ 20,000 Taxable income $ 352,600 Tax liability 74,863 c. What is the marginal tax rate on Scott's bonus? Enter the percent to one decimal place. 21 % Table 1. 2020 Tax Brackets and Rates For Single Rate Individuals, Taxable Income Over For Married Individuals Filing Joint Returns, Taxable Income Over $0 For Heads of Households, Taxable Income Over $0 10% $0 12% $9,875 $19,750 $14,100 22% $40,125 $80,250 $53,700 24% $85,525 $171,050 $85,500 32% $163,300 $326,600 $163,300 35% $207,350 $414,700 $207,350 37% $518,400 $622,050 $518,400
Problem 9-45 (LO. 6) Scott and Laura are married and will file a joint tax return. Scott has a sole proprietorship (not a "specified services" business) that generates qualified business income of $300,000. The proprietorship pays W-2 wages of $40,000 and holds qualified property with an unadjusted basis of $10,000. Laura is employed by a local school district. Their taxable income before the QBI deduction is $386,600 (this is also their modified taxable income). a. Determine Scott and Laura's QBI deduction, taxable income, and tax liability for 2020. QBI deduction $ 20,000 Taxable income $ 346,600 Tax liability 72,943 b. After providing you with the original information in the problem, Scott finds out that he will be receiving a $6,000 bonus in December 2020 (increasing their taxable income before the QBI deduction by this amount). Redetermine Scott and Laura's QBI deduction, taxable income, and tax liability for 2020. QBI deduction $ 20,000 Taxable income $ 352,600 Tax liability 74,863 c. What is the marginal tax rate on Scott's bonus? Enter the percent to one decimal place. 21 % Table 1. 2020 Tax Brackets and Rates For Single Rate Individuals, Taxable Income Over For Married Individuals Filing Joint Returns, Taxable Income Over $0 For Heads of Households, Taxable Income Over $0 10% $0 12% $9,875 $19,750 $14,100 22% $40,125 $80,250 $53,700 24% $85,525 $171,050 $85,500 32% $163,300 $326,600 $163,300 35% $207,350 $414,700 $207,350 37% $518,400 $622,050 $518,400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Problem 9-45 (LO. 6)
Scott and Laura are married and will file a joint tax return. Scott has a sole proprietorship (not a "specified services" business) that
generates qualified business income of $300,000. The proprietorship pays W-2 wages of $40,000 and holds qualified property with an
unadjusted basis of $10,000. Laura is employed by a local school district. Their taxable income before the QBI deduction is $386,600 (this
is also their modified taxable income).
a. Determine Scott and Laura's QBI deduction, taxable income, and tax liability for 2020.
QBI deduction
$
20,000
Taxable income
$
346,600
Tax liability
72,943
b. After providing you with the original information in the problem, Scott finds out that he will be receiving a $6,000 bonus in December
2020 (increasing their taxable income before the QBI deduction by this amount). Redetermine Scott and Laura's QBI deduction, taxable
income, and tax liability for 2020.
QBI deduction
$
20,000
Taxable income
$
352,600
Tax liability
74,863
c. What is the marginal tax rate on Scott's bonus? Enter the percent to one decimal place.
21
%
Transcribed Image Text:Table 1. 2020 Tax Brackets and Rates
For Single
Rate Individuals, Taxable
Income Over
For Married Individuals Filing
Joint Returns, Taxable Income
Over
$0
For Heads of
Households, Taxable
Income Over
$0
10%
$0
12%
$9,875
$19,750
$14,100
22%
$40,125
$80,250
$53,700
24%
$85,525
$171,050
$85,500
32%
$163,300
$326,600
$163,300
35%
$207,350
$414,700
$207,350
37%
$518,400
$622,050
$518,400
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education