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- A single taxpayer with and AGI of $200,000, medical expenses of $10,000 and deductible taxes of $25,000 will itemize this a
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Answer #1

The qualified business income deduction (QBI) allows eligible self-employed and small-business owners to deduct up to 20% of their qualified business income on their taxes.

In general, if your total taxable income in 2019 was under $160,700 for single filers or $321,400 for joint filers, you may qualify for the deduction. In 2020, the limits are $163,300 for single filers or $326,600 for joint filers. If you’re over that limit, complicated IRS rules determine whether your business income qualifies for a full or partial deduction.

A. AGI = 200000

Medical Expenses = 10000

Itemize deduction. = 25000

Net Taxable Income = $165,000/-

B. AGI. = 200000

Itemize deduction = 50000

QBI Deduction. = 20000. (100000 x 20%)

Net Taxable Income =$ 130,000/-

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