Application Problems

LO 10-1, 10-2

Keiji Jones is the owner of a small retail business operated as a sole proprietorship. During 2021, his business recorded the following items of income and expense:

Revenue from inventory sales		$147,000
Cost of goods sold		33,500
Business license tax		2,400
Rent on retail space		42,000
Supplies		15,000
Wages paid to employees		22,000
Payroll taxes		1,700
Utilities		3,600

Compute taxable income attributable to the sole proprietorship by completing Schedule C to be included in Keijis 2021 Form 1040.

Compute self-employment tax payable on the earnings of Keijis sole proprietorship by completing a 2021 Schedule SE, Form 1040.

Assume that Keijis business is not a service business, and that it has $155,000 unadjusted basis in tangible depreciable property. Calculate Keijis 2021 QBI deduction, before any overall taxable income limitation.

Can you check that all items go in correct lines?

For Schedule SE, can you indicate where the item should go?