Question

1. Stephanie is 12 years old and often assists neighbors on weekends by babysitting their children. Stephanie reported $400 of earnings from her babysitting. Calculate the 2020 standard deduction Stephanie will claim (assume that Stephanie’s parents will claim her as a dependent).

QUESTION 9

1. Stephanie is 12 years old and often assists neighbors on weekends by babysitting their children. Stephanie reported $1,600 of earnings from her babysitting. Calculate the 2020 standard deduction Stephanie will claim (assume that Stephanie’s parents will claim her as a dependent).

QUESTION 10

1. Stephanie is 12 years old and often assists neighbors on weekends by babysitting their children. Stephanie reported $13,500 of earnings from her babysitting. Calculate the 2020 standard deduction Stephanie will claim (assume that Stephanie’s parents will claim her as a dependent).

QUESTION 11

1. Roquan is an attorney and practices as a sole proprietor. This year, Roquan had net business income of $90,000 from his law practice. Assume that Roquan pays $40,000 wages to his employees, he has $10,000 of property (unadjusted basis of equipment he purchased last year), has no capital gains or qualified dividends, and his taxable income before the deduction for qualified business income is $315,000. Calculate Roquan’s deduction for qualified business income.

QUESTION 12

1. Katie is a shareholder in Engineers One, a civil engineering company. This year, Katie’s share of net business income from Engineers One is $170,000. Assume that Katie’s allocation of wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers One’s qualified property is $150,000 (unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income, no capital gains or qualified dividends, and that her taxable income before the deduction for qualified business income is $400,000. Calculate Katie’s deduction for qualified business income.

QUESTION 13

1. Katie is a shareholder in Engineers One, a civil engineering company. This year, Katie’s share of net business income from Engineers One is $170,000. Assume that Katie’s allocation of wages paid by Engineers One to its employees is $300,000 and her allocation of Engineers One’s qualified property is $150,000 (unadjusted basis of equipment, all purchased within past three years). Assume Katie has no other business income, no capital gains or qualified dividends, and that her taxable income before the deduction for qualified business income is $140,000. Calculate Katie’s deduction for qualified business income.

Answer 1

Part 1

Deduction for dependent is higher of $1100 or $350+earned income up to maximum of $12400 i.e. $1100 or $750 (350+400)

Stephanie's standard deduction = $1100

Part 9

Deduction for dependent is higher of $1100 or $350 +earned income up to maximum of $12400 i.e $1100 or $1950 (350+1600)

Stephanie's standard deduction = $1950

Part 10

Deduction for dependent is higher of $1100 or $350 + earned income up to maximum of $12400 i.e $1100 or $13850 (350+13500)

Stephanie's standard deduction = $12400

Part 11

QBI Deduction is the lesser of 20% of qualified business income (QBI) or the greater of

50% of W-2 wages with respect to the businesses +2.5% of the unadjusted basis of all "qualified property"

20% of taxable income of the business owner

however ,the W-2 limitations is not applicable if a taxpayer's taxable income is less than $321400 if married filling jointly or $160700 for all other taxpayers

Roquan is an attorney and is single

Roquan's deduction will be lesser of

20% of QBI or

20% of taxable income

Therefore,

QBI Deduction = 20% * QBI = 20%*90000= $18000