Question 1

A single taxpayer has taxable income of 00,000 (before QBI deduction). Their sole source of income is a law practice (SSTB). The threshold for QBI phase-out is 91,950 and the top of the range is 41,950 (Year 1 inflation adjusted). What is their QBI deduction?

Accepted Answer

Identify if SSTB (Law, Health, Accounting, etc.). Check Taxable Income vs Thresholds. If > Upper Limit, SSTB gets NO deduction.

Question 2

What mistakes do candidates make on this CPA question?

Accepted Answer

Applying the W-2 wage limitation instead of the SSTB complete disallowance.

A single taxpayer has taxable income of 00,000 (before QBI deduction). Their sole source of income is a law practice (SSTB). The threshold for QBI phase-out is 91,950 and the top of the range is 41,950 (Year 1 inflation adjusted). What is their QBI deduction?

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Full Answer

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