In 2022, Wilma Way’s sole proprietorship, WW Bookstore, generated $120,000 net profit. In addition, Wilma recognized a $17,000 Section 1231 gain on the sale of business furniture. The business checking account earned $960 interest income.

a. Which of these income items are subject to self-employment tax?

b. Compute Wilma’s 2022 self-employment tax, assuming Wilma has no other earned income.

c. Compute Wilma’s allowable QBI deduction, assuming $43,000 of W-2 wages and $90,000 unadjusted basis of tangible depreciable property. Further assume the overall taxable income limitation on QBI does not apply and Wilma’s overall taxable income is sufficiently high that the W-2 wage limitation applies.

d. Compute the overall impact of the bookstore activity on Wilma’s 2022 taxable income.