Question 89

Josh started a business at the beginning of 2019 in San Francisco. He continued to work at his regular job and devoted his evenings to his business. Josh understood that he would pay at least the same amount of taxes in the current tax year as he did in the prior year (withholding from his regular job). During the first half of 2020, due to the COVID-19 pandemic, Josh made only enough money from his business to cover expenses. In August, during the third quarter of 2020, he secured a large contract and had a net profit of $35,000. During the fourth quarter, he secured two more contracts and achieved a fourth-quarter net profit of $80,000. When should Josh start making estimated tax payments? (Do not consider the special extension provided by the Coronavirus crisis). a) January 15, 2020. b) Josh may wait until he files his return to pay Self-Employment taxes. c) September 15, 2020. d) June 15, 2021

Question 98

The Qualified Business Income (QBI) is new for 2018, and it will be applied through the 2025 tax year. It allows taxpayers to claim up to a 20 percent deduction.Taking this law into account, all of the following statements are true, except for: a) Sole Proprietors, shareholders in an S-Corporation, and partners in a partnership may qualify. b) The deduction has many rules relating to what is domestic income, what is qualified income, and the types of businesses that are allowed. c) The deduction cannot be taken in addition to a Standard Deduction or Itemized Deduction. d) Individuals receiving a W-2 do not qualify for the QBI.