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To calculate Nevaeh's qualified business income ( QBI ) deduction, we need to follow these steps: Calculate Nevaeh's QBI: Nevaeh's QBI is equal to her

To calculate Nevaeh's qualified business income (QBI) deduction, we need to follow these steps:
Calculate Nevaeh's QBI:
Nevaeh's QBI is equal to her net profit from her business since she did not have any other adjustments (like employee wages or depreciation). Therefore:
QBI=NetProfit=170,000\text{QBI}=\text{Net Profit}=170,000QBI=NetProfit=170,000
Determine the QBI Deduction:
The QBI deduction is generally 20% of the QBI, but it can be limited based on taxable income thresholds. Since Nevaeh's joint taxable income is $324,750, we need to check if it exceeds the threshold for the QBI deduction limit.
For the 2022 tax year, the QBI deduction is subject to certain thresholds:
For married couples filing jointly, the threshold is $329,800. If taxable income exceeds this threshold, certain limitations apply.
Since Nevaeh's taxable income is $324,750, it is below the threshold, and thus, she is eligible for the full QBI deduction of 20% on her QBI.
QBIDeduction=20%QBI=20%170,000=34,000\text{QBI Deduction}=20\%\times \text{QBI}=20\%\times 170,000=34,000QBIDeduction=20%QBI=20%170,000=34,000
Conclusion
Nevaeh's qualified business income (QBI) deduction is:
Answer: 4. $34,000.

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