In 2020, Henry Jones (Social Security number 123-45-6789) works as a freelance driver, finding customers using various platforms like Uber and Grubhub. He is single and has no other sources of income. In 2020, Henry's qualified business income from driving is $71,200. Assume Henry takes the standard deduction of $12,400. Click here to access the 2020 individual tax rate schedule to use for this problem. Assume the QBI amount is net of the self-employment tax deduction. Round the tax computation to the nearest dollar. a. Compute Henry's QBI deduction and his tax liability for 2020. QBI deduction: Tax liability: 11,760 b. Complete Henry's 2020 Form 8995 (Qualified Business Income Deduction Simplified Computation). Enter all amounts as positive numbers. If an amount is zero, enter "0". Form 8995 Department of the Treasury Internal Revenue Service Name(s) shown on return Henry Jones Qualified Business Income Deduction Simplified Computation OMB No. 1545-0123 Attach to your tax return. Go to www.irs.gov/Form8995 for instructions and the latest information. 2020 Attachment Sequence No. 55 Your taxpayer identification number 123-45-6789 Note. You can claim the qualified business income deduction only if you have qualified business income from a qualified trade or business, real estate investment trust dividends, publicly traded partnership income, or a domestic production activities deduction passed through from an agricultural or horticultural cooperative. See instructions. Use this form if your taxable income, before your qualified business income deduction, is at or below $163,300 ($326,600 if married filing jointly), and you aren't a patron of an agricultural or horticultural cooperative. 1 (a) Trade, business, or aggregation name i Henry Jones Transportation ii !!! iv V (b) Taxpayer identification number (c) Qualified business income or (loss) 123-45-6789 2 Total qualified business income or (loss). Combine lines 1i through 1v, column (c).. 2 3 Qualified business net (loss) carryforward from the prior year... 3 ( 4 Total qualified business income. Combine lines 2 and 3. If zero or less, enter -0- 4 5 Qualified business income component. Multiply line 4 by 20% (0.20). 6 Qualified REIT dividends and publicly traded partnership (PTP) income or (loss) (see instructions)... 6 5 7 Qualified REIT dividends and qualified PTP (loss) carryforward from the prior year.. 7 8 Total qualified REIT dividends and PTP income. Combine lines 6 and 7. If zero or less, enter -0- 9 REIT and PTP component. Multiply line 8 by 20% (0.20). 10 Qualified business income deduction before the income limitation. Add lines 5 and 9 11 Taxable income before qualified business income deduction.. 8 11 7 ) 9 > 0 10 > 12 Net capital gain (see instructions). 12 13 Subtract line 12 from line 11. If zero or less, enter -0- 13 14 Income limitation. Multiply line 13 by 20% (0.20). 14 7 15 Qualified business income deduction. Enter the lesser of line 10 or line 14. Also enter this amount on the applicable line of your return... 15 162 16 Total qualified business (loss) carryforward. Combine lines 2 and 3. If greater than zero, enter -0- 17 Total qualified REIT dividends and PTP (loss) carryforward. Combine lines 6 and 7. If greater than zero, enter -0- . For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. 1000 17 Cat. No. 37806C Form 8995 (2020) Single-Schedule X If taxable 2020 Tax Rate Schedules Head of household-Schedule Z of the If taxable of the income is: Over- But not over- amount income is: But not amount The tax is: over- Over- over- The tax is: over- $ 0 $ 9,875 .........10% $ 0 $ 0 $ 14,100 .10% $ 0 9,875 40,125 40,125 85,525 $ 987.50 + 12% 9,875 14,100 53,700 $ 1,410.00+12% 14,100 4,617.50 +22% 40,125 53,700 85,500 6,162.00 +22% 53,700 85,525 163,300 14,605.50 +24% 85,525 85,500 163,300 13,158.00 +24% 85,500 163,300 207,350 33,271.50 + 32% 163,300 163,300 207,350 31,830.00+32% 163,300 207,350 518,400 47,367.50 + 35% 207,350 207,350 518,400 45,926.00+ 35% 207,350 518,400 156,235.00 + 37% 518,400 518,400 154,793.50 + 37% 518,400 Married filing jointly or Qualifying widow(er) Married filing separately-Schedule Y-2 Schedule Y-1 If taxable income is: Over- But not over- of the amount The tax is: over- If taxable income is: Over- But not over- of the amount The tax is: over- $ 0 $ 19,750 .........10% $ 0 $ 0 $ 9,875 .........10% $ 0 19,750 80,250 $ 1,975.00+12% 19,750 9,875 40,125 $ 987.50 + 12% 9,875 80,250 171,050 9,235.00 +22% 80,250 40,125 85,525 4,617.50 +22% 40,125 171,050 326,600 29,211.00 + 24% 171,050 85,525 163,300 14,605.50 + 24% 85,525 326,600 414,700 66,543.00 + 32% 326,600 163,300 207,350 33,271.50+32% 163,300 414,700 622,050 94,735.00+35% 414,700 207,350 311,025 47,367.50+ 35% 207,350 622,050 167,307.50+37% 622,050 311,025 83,653.75+37% 311,025