Micah and Nancy are married and will file a joint tax return. Nancy has a sole proprietorship (not a specified services business) that generates qualified business income of $300,000. The proprietorship pays W2 wages of $40,000 and holds property with an unadjusted basis of $10,000. Micah is employed by a local school district. Their taxable income before the QBI deduction is $400,100 (this is also their modified taxable income).

Assume the QBI amount is net of the self-employment tax deduction.

a) What is Micah and Nancys QBI deduction for 2022?

b) What is Micah and Nancys taxable income for 2022?

c) What is Micah and Nancys tax liability for 2022? (use 2022 Tax Rate)

Please use 2022 Tax Rate