Jason and Paula are married. They file a joint return for 2019 on which they report...

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Jason and Paula are married. They file a joint return for 2019 on which they report taxable income before the OBI deduction o

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Answer 1

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A)

Jason and Paula’s taxable income before the QBI deduction=$200,000. Therefore,W2 wages/capital investment limitation is not applicable to them.

Jason’s QBI amt=$30,000 ($150,000 x 20%).

Paula’s QBI amount= $(8,000) [$(40,000) x 20%]. Their combined qualified business income amount is $22,000 [$30,000+$(8,000)]. As this amount is less than the overall limitation based on modified taxable income ($200,000 x 20% = $40,000), their QBI deduction is $22,000.

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