Graham, a single, calendar year individual, had a rather good year in 2019. He generated business income of $220,000 and had $79,000 of business deductions, including deductible meals of $4,250 (before the required 50% reduction). Conservative Graham had taxable interest income of $18,600 and no other taxable income. 

Graham's self-employment tax for 2019 is $20,222. Graham can deduct one-half of this in arriving at his adjusted gross income. 

Graham's deductions and related information are as follows: 

QBI deduction in arriving at AGI $26,603 

Standard deduction 18,150 

Itemized deductions 17,700 

Dependents (Graham's mother, aged 75) 

Create an Excel spreadsheet to: 

Calculate Graham's taxable income and his gross federal income tax. 

Based on your answers, 

Calculate Graham's: 

Average tax rate? 

Effective tax rate? 

Marginal tax rate? 

Basic Tax Formula: 

Income as most broadly conceived 

Minus: Exclusions Equals: 

Gross income Minus: 

Deductions for AGI Equals: 

Adjusted gross income Minus: 

Larger of itemized deductions or standard deduction Minus: 

QBI deduction Equals: 

Taxable income Apply tax rates Equals gross income tax Minus: 

Credits and prepayments Equals: 

Tax due or refund.