Through November, Cameron has received gross income of $131,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,860 of revenue at a cost to Cameron of $4,100, which is deductible for AGI. In contrast, engagement 2 will generate $7,200 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 (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (6) Deduction for QBI Taxable income Engagement 1 Engagement 2
Through November, Cameron has received gross income of $131,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $9,860 of revenue at a cost to Cameron of $4,100, which is deductible for AGI. In contrast, engagement 2 will generate $7,200 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 (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (6) Deduction for QBI Taxable income Engagement 1 Engagement 2
Chapter12: Tax Credits And Payments
Section: Chapter Questions
Problem 25P
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Transcribed Image Text:Through November, Cameron has received gross income of $131,000. For December, Cameron is
considering whether to accept one more work engagement for the year. Engagement 1 will
generate $9,860 of revenue at a cost to Cameron of $4,100, which is deductible for AGI. In
contrast, engagement 2 will generate $7,200 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
(2) Income from engagement
(3) Additional for AGI deduction
(4) Adjusted gross income
(6) Deduction for QBI
Taxable income
Engagement 1 Engagement 2
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