Through November, Cameron has received gross income of $70,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $8,820 of revenue at a cost to Cameron of $3,900, which is deductible for AGI. In contrast, engagement 2 will generate $7,250 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer.

Calculate Camerons taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions.

Engagement 1 Engagement 2 70,000 $ 70,000 8,820 7,250 Description (1) Gross income before new work engagement (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (5) Greater of itemized deductions or standard deduction (6) Deduction for QBI Taxable income