Haley, a single taxpayer, owns and operates a Cafe (as a sole proprietorship). The business is not a specified services business. In 2019, the business pays $60,000 in W-2 wages, has $150,000 of qualified property, and $200,000 in net income (all of which is qualified business income). Haley also has a part-time job earning wages of $11,000, receives $3,200 of interest income, and will take the standard deduction. What is Haley’s qualified business income deduction?

A. Qualified Business Income(QBI):- This is the Net income earned over and above the expenses. This is the business profit which is being earned over an accounting period. To calculate the QBI following are not considered

1. Interest Income 2. Income Earned Outside USA 3. Capital gain or Losses 4. Dividends and 5.Certain payments made to partners and Shareholders.

B. Qualified Business Income Deduction:- To calculate the QBI deduction the certain income limits have been defined. The QBI deduction is available at the rate of 20% of the QBI to the self employed and small business owners.

Single Filer- The limit in 2020 is $ 1,63,300 as Total Income

Joint filers- The Limit in 2020 is $ 3,26,600 as Total Income.

Since Haley does not qualify the Single Filer Limit as mentioned above, his QBI deduction is 0(Zero).

Explanation:

match the scenarios with terms related to financial aid.

pell grant

student loan

merit-based scholarship

richard is one of the leading college basketball players in the state of florida. he also maintains a good academic record. looking at his talent and potential, furman university offers to bear the expenses for his college education.

arrowright

anita wants to pursue a certificate program in sports nutrition. to pay for the course, she borrows money by filing the fafsa.

arrowright

nathan comes from a low-income household. he wants to pursue an undergraduate degree in marketing. he receives financial aid covering 50 percent of his college expenses. nathan does not have to pay back this amount.

arrowright