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In 2020, Henry Jones works as a freelance driver, finding customers using various platforms like Uber and Grubhub. He is single and has no other sources of income. In 2020, Henry's qualified business income from driving is $61,200. Assume Henry takes the standard deduction of $12,400. Click here to access the 2020 individual tax rate schedule to use for this problem. Assume the QBI amount is net of the self-employment tax deduction. Compute Henry's QBI deduction and his tax liability for 2020.

Sagot :

jepessoa

Answer:

Henry's QBI deduction = $9,760

Henry's taxable income = $39,040

Henry's tax liability = $4,487.30

Explanation:

QBI deduction = (AGI - standard deduction) x 20% = ($61,200 - $12,400) x 20% = $9,760

total taxable income = $61,200 - $12,400 - $9,760 = $39,040

tax liability = $987.50 + [12% x ($39,040 - $9,875)] = $987.50 + $3,449.80 = $4,487.30

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