Question

Jacob is a member of WCC (an LLC taxed as a partnership). Jacob was allocated $95,000 of business income from WCC for the year. Jacob’s marginal income tax rate is 37 percent. The business allocation is subject to 2.9 percent of self-employment tax and 0.9 percent additional Medicare tax. (Round your intermediate calculations to the nearest whole dollar amount.)

b. What is the amount of tax Jacob will owe on the income allocation if the income is qualified business income (QBI) and Jacob qualifies for the full QBI deduction?

Answer 1

solutions Particular Amount 95000 Business Income allocations QBI deduction Deduction for 50% of SE TAX (19000) 95000X 20% (1272) 95000 80.9235 X 0.029 8015 74728 27649 Net Income taxable business Income Income tax paed by owner self employment Tax additional Medicare Tax owner - Level Tax 2544 74728 80.37 95000X0.923570.029 95000 80.9235X0.009 27649+25444790 990 30983