Question

Roquan, a single taxpayer, is an attorney and practices as a sole proprietor. This year, Roquan had net profit from self-employment of $97,455 from his law practice. The deductible portion of his self-employment taxes is $7,455. His taxable income before the deduction for qualified business income is $100,000. (Leave no answer blank. Enter zero if applicable.)Required:a) Calculate Roquan’s deduction for qualified business income.b) Assume the same facts provided above, except Roquan’s taxable income before the deduction for qualified business income is $300,000.

Answer 1

Step-by-step explanation:

Given that :

Roquan is a single taxpayer and an attorney;

Roquan had net profit from self-employment of $97,455

The deductible portion of his self-employment taxes is $7,455

His taxable income before the deduction for qualified business income is $100,000.

SInce ; he is a single taxpayer and an attorney; Roquan is eligible for The standard 20% Qualified Business Income and given that his taxable income is lesser than a threshold of $157000; W-2 limitations do not apply to Roquan.

So in the case of Roquan.

Roquan deduction for qualifies business income will be lesser 20% of the Qualified Business Income.

Roquan deduction for qualifies business income = 20% × $97,455

Roquan deduction for qualifies business income = 0.20 × $97,455

Roquan deduction for qualifies business income = $19, 491

b.

Roquan taxable income is $300,000.

Given that the income is greater than Standard threshold of $207,500 for a single taxpayer and is from "Specified service businesses" as an attorney and practices as a sole proprietor , he is not eligible for the 20% deduction.

So;

Roquan deduction for qualifies business income = $0