Micah and Nancy are married and will file jointly. Nancy generates $300,000 of qualified business income from her single member LLC (a law firm). She reports her business as a sole proprietorship. Wages paid by the law firm amount to $40,000; the law firm has no significant property. Micah is employed as a tax manager by a local CPA firm. Their modified taxable income is $400,100 (this is also their taxable income before the deduction for qualified business income).

a) What is Micah and Nancys tentative QBI based on the W2 Wages/Capital Investment Limit?

b) Determine Micah and Nancys allowable QBI deduction for 2022.

Please use 2022 Tax Rate