Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

It's not 32 % or 33% Scott and Laura are married and will file a joint tax return. Scott has a sole proprietorship (not a

image text in transcribedIt's not 32 % or 33%

Scott and Laura are married and will file a joint tax return. Scott has a sole proprietorship (not a "specified services" business) that generates qualified business income of $300,000. The proprietorship pays W-2 wages of $40,000 and holds qualified property with an unadjusted basis of $10,000. Laura is employed by a local school district. Their taxable income before the QBI deduction is $386,600 (this is also their modified taxable income). a. Determine Scott and Laura's QBI deduction, taxable income, and tax liability for 2020. QBI deduction $ 36,000 Taxable income $ 350,600 Tax liability 74,223 b. After providing you with the original information in the problem, Scott finds out that he will be receiving a $6,000 bonus in December 2020 (increasing their taxable income before the QBI deduction by this amount). Redetermine Scott and Laura's QBI deduction, taxable income, and tax liability for 2020. QBI deduction $ 33,600 Taxable income $ 359,000 Tax liability 76,911 c. What is the marginal tax rate on Scott's bonus? Enter the percent to one decimal place. X %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions