Rita, a single taxpayer, has net Schedule C income of $150000 from a specified service trade or business (SSTB). She does not have any other business income. She also has orm W-2 income and her taxable income for the year is $221000, before the QBI deduction. As Rita's tax preparer, what information will you share with her regarding her eligibility to claim the QBI deduction?

Unfortunately, she is not entitled to the deduction on her tax return, since her taxable income is over the top threshold.

She qualified for the deduction but the amount will be limited based on her income.

She qualifies for the deduction which will apply to 20% of her taxable income.

She qualifies for the deduction which will apply to 20% of her net Schedule C income.