Question

In 2023, Meghann, a single taxpayer, has QBI of $140,600 and modified taxable income of $98,420 (this is also her taxable income before the QBI deduction). Given this information, what is Meghann's QBI deduction? Meghann's QBI deduction is $_____

Answer 1

Meghann's Qualified Business Income (QBI) deduction for the year 2023 is calculated as 20% of her modified taxable income, which amounts to $19,684, as her modified taxable income is less than her QBI.

Step-by-step explanation:

Meghann, a single taxpayer, has a Qualified Business Income (QBI) of $140,600 and modified taxable income of $98,420 for the year 2023. The QBI deduction is generally 20% of her qualified business income. However, since her modified taxable income is less than the QBI, her deduction is limited to 20% of $98,420, which equates to her modified taxable income in this case.

Calculating the QBI deduction:

• Modified Taxable Income: $98,420
• QBI: $140,600
• QBI Deduction: 20% of Modified Taxable Income
• 20% of $98,420 = $19,684 (QBI Deduction)

Therefore, Meghann's QBI deduction is $19,684.