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Mary, a single taxpayer, operates a printing business as a sole proprietor. The business has two...

Mary, a single taxpayer, operates a printing business as a sole proprietor. The business has two employees who are paid a total of $85,000 during 2020. Assume that the business has no significant assets. During 2020, the business generates $60,000 of income, and her taxable income before the QBI deduction is $75,000. What is Mary's deduction for QBI?

$42,500

$12,000

$15,000

13,750

$0

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Answer #1

As Mary's taxable income is less than $157,000, she will receive complete 20% deduction.

Therefore her QBI deduction = 20% of $60,000, which equals to $12000.

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