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eligible QBI deduction

Bruce is a CPA who operates his tax service business as a sole proprietorship. He files a joint tax return with his wife.  Their tax return reported $361,600 in taxable income and $375,000 in profit from the tax service, before the deduction for qualified business income (QBI). How much of the income from Bruce's tax services is eligible for the QBI deduction?

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Answer #1

Since their taxable income is above the $326,600 threshold for MFJ but below $426,600, the phase-out rules apply.

($361,600 - $326,600) = $35,000 ÷ $100,000 phase out = 35% is not eligible for the QBI deduction.  $243,750 is eligible ($375,000 × 65%). 


answered by: olessia silakova
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