2. Which is NOT true of the QBI-Qualified Business Income Deduction? Caution: read all answers before...

2. Which is NOT true of the QBI-Qualified Business Income Deduction? Caution: read all answers before you choose.

a. The QBI is 20%

b. The QBI doesn't reduce self-employment tax

c. The QBI doesn't reduce adjusted gross income

d. If married people, make more than $315,000 or single people make more than $157,500 there are many limitations on this deduction

e. The QBI can be used for sole proprietorships (schedule C), partnerships, or Sub S corporations.

f. All of the following are true.

Expert Solution

Answer: Option f. All of the following are true.
Explanation:

Option a. : The deduction under section 199A of the Tax Cuts and Jobs act allows 20% deduction to QBI.
Option b. : QBI is available to qualified business income of pass through entity so self employed can not use QBI to reduce their tax liability.
Option c. : QBI is treated as an itemized deduction so it will not reduce the gross total income.
Option d. : Specified service trades or business in some specified field of health, law, consulting,athentic, financ services etc then it does not fully qualify for QBI unless income of married people threshold $ 3,15,000 and for single people the threshold is $ 1,57,500.
Option e.: Thr QBI benefits are available to non C - corporations. So QBI deduction is available for some proprietorship ( schedule C), partnerships or even sub S corporations.
Option f. : As all the other options are correct so it is the correct answer.

ekkarill92 answered 11 months ago

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