In 2019, Henry Jones (Social Security number 123-45-6789) works as a freelance driver, finding customers using...

  

  

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In 2019, Henry Jones (Social Security number 123-45-6789) 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 2019, Henry s qualified business income from driving is $61,200. Assume Henry takes the standard deduction of $12,200. Click here to access the 2019 individual tax rate schedule to use for this problem. Assume the QBI amount is net of the self-employment tax deduction. a. Compute Henry s QBI deduction and his tax liability for 2019. QBI deduction: Tax liability (round to the nearest dollar): $ b. Complete Henry s 2019 Form 8995 (Qualified Business Income Deduction Simplified Computation). Enter all amounts as positive numbers. Form 8995 Department of the Treasury Internal Revenue Service Name(s) shown on return Henry Jones 1 ii i Henry Jones Transportation. iv Qualified Business Income Deduction Simplified Computation ► Attach to your tax return. ► Go to www.irs.gov/Form8995 for instructions and the latest information. V (a) Trade, business, or aggregation name 2 Total qualified business income or (loss). Combine lines 1i through 1v, column (c) .. 3 Qualified business net (loss) carryforward from the prior year. 4 Total qualified business income. Combine lines 2 and 3. If zero or less, enter -0-. 5 Qualified business income component. Multiply line 4 by 20% (0.20).. 6 Qualified REIT dividends and publicly traded partnership (PTP) income or (loss) (see instructions). (b) Taxpayer identification number 2 3 4 123-45-6789 ( 6 7 Qualified REIT dividends and qualified PTP (loss) carryforward from the prior year.. 7 ( OMB No. 1545-0123 Your taxpayer identification number 2019 Attachment Sequence No. 55 5 123-45-6789 (c) Qualified business. income or (loss) 6 Qualified REIT dividends and publicly traded partnership (PTP) income or (loss) (see instructions). 7 Qualified REIT dividends and qualified PTP (loss) carryforward from the prior year.. 8 Total qualified REIT dividends and PTP income. Combine lines 6 and 7. If zero or less, enter -0- 9 REIT and PTP component. Multiply line 8 by 20% (0.20). 10 Qualified business income deduction before the income limitation. Add lines 5 and 9 11 Taxable income before qualified business income deduction .. 12 Net capital gain (see instructions) 13 Subtract line 12 from line 11. If zero or less, enter -0- 6 7 8 11 12 13 ( 14 Income limitation. Multiply line 13 by 20% (0.20) 15 Qualified business income deduction. Enter the lesser of line 10 or line 14. Also enter this amount on the applicable line of your return.. 16 Total qualified business (loss) carryforward. Combine lines 2 and 3. If greater than zero, enter -0- 17 Total qualified REIT dividends and PTP (loss) carryforward. Combine lines 6 and 7. If greater than zero, enter -0-...... For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 9 10 14 15 16 17 Form 8995 (2019) Single-Schedule X If taxable income is: Over- $ income is: Over- $ 0 But not over- 19,400 78,950 168,400 321,450 408,200 612,350 $ 9,700 39,475 84,200 160,725 204,100 510,300 ..……..... 0 9,700 970.00 +12% 39,475 4,543.00 +22% 84,200 14,382.50 +24% 160,725 32,748.50 +32% 204,100 46,628.50 + 35% 510,300 153,798.50 + 37% Married filing jointly or Qualifying widow(er)- Schedule Y-1 If taxable But not over- $ 19,400 78,950 168,400 321,450 408,200 612,350 $ The tax is: $ .........10% The tax is: .........10% 1,940.00 +12% 9,086.00 +22% 28,765.00 +24% 2019 Tax Rate Schedules 65,497.00+ 32% 93,257.00+ 35% 164,709.50 + 37% of the amount over- $ 0 9,700 39,475 84,200 160,725 204,100 510,300 of the amount over- $ 0 19,400 78,950 168,400 321,450 408,200 612,350 Head of household-Schedule Z If taxable income is: Over- $ 0 If taxable income is: Over- $ But not over- 0 9,700 39,475 84,200 160,725 204,100 306,175 $ 13,850 52,850 84,200 160,700 204,100 510,300 .........10% 13,850 $ 1,385.00 + 12% 52,850 6,065.00 +22% 84,200 12,962.00 +24% 160,700 31,322.00 + 32% 204,100 45,210.00 + 35% 510,300 152,380.00 + 37% Married filing separately-Schedule Y-2 .... But not over- $ 9,700 39,475 84,200 160,725 204,100 306,175 The tax is: The tax is: .........10% 970.00 +12% 4,543.00 +22% 14,382.50 +24% 32,748.50 + 32% 46,628.50 + 35% 82,354.75 +37% $ of the amount over- $ 0 13,850 52,850 84,200 160,700 204,100 510,300 $ of the amount over- 0 9,700 39,475 84,200 160,725 204,100 306,175 In 2019, Henry Jones (Social Security number 123-45-6789) 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 2019, Henry s qualified business income from driving is $61,200. Assume Henry takes the standard deduction of $12,200. Click here to access the 2019 individual tax rate schedule to use for this problem. Assume the QBI amount is net of the self-employment tax deduction. a. Compute Henry s QBI deduction and his tax liability for 2019. QBI deduction: Tax liability (round to the nearest dollar): $ b. Complete Henry s 2019 Form 8995 (Qualified Business Income Deduction Simplified Computation). Enter all amounts as positive numbers. Form 8995 Department of the Treasury Internal Revenue Service Name(s) shown on return Henry Jones 1 ii i Henry Jones Transportation. iv Qualified Business Income Deduction Simplified Computation ► Attach to your tax return. ► Go to www.irs.gov/Form8995 for instructions and the latest information. V (a) Trade, business, or aggregation name 2 Total qualified business income or (loss). Combine lines 1i through 1v, column (c) .. 3 Qualified business net (loss) carryforward from the prior year. 4 Total qualified business income. Combine lines 2 and 3. If zero or less, enter -0-. 5 Qualified business income component. Multiply line 4 by 20% (0.20).. 6 Qualified REIT dividends and publicly traded partnership (PTP) income or (loss) (see instructions). (b) Taxpayer identification number 2 3 4 123-45-6789 ( 6 7 Qualified REIT dividends and qualified PTP (loss) carryforward from the prior year.. 7 ( OMB No. 1545-0123 Your taxpayer identification number 2019 Attachment Sequence No. 55 5 123-45-6789 (c) Qualified business. income or (loss) 6 Qualified REIT dividends and publicly traded partnership (PTP) income or (loss) (see instructions). 7 Qualified REIT dividends and qualified PTP (loss) carryforward from the prior year.. 8 Total qualified REIT dividends and PTP income. Combine lines 6 and 7. If zero or less, enter -0- 9 REIT and PTP component. Multiply line 8 by 20% (0.20). 10 Qualified business income deduction before the income limitation. Add lines 5 and 9 11 Taxable income before qualified business income deduction .. 12 Net capital gain (see instructions) 13 Subtract line 12 from line 11. If zero or less, enter -0- 6 7 8 11 12 13 ( 14 Income limitation. Multiply line 13 by 20% (0.20) 15 Qualified business income deduction. Enter the lesser of line 10 or line 14. Also enter this amount on the applicable line of your return.. 16 Total qualified business (loss) carryforward. Combine lines 2 and 3. If greater than zero, enter -0- 17 Total qualified REIT dividends and PTP (loss) carryforward. Combine lines 6 and 7. If greater than zero, enter -0-...... For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 9 10 14 15 16 17 Form 8995 (2019) Single-Schedule X If taxable income is: Over- $ income is: Over- $ 0 But not over- 19,400 78,950 168,400 321,450 408,200 612,350 $ 9,700 39,475 84,200 160,725 204,100 510,300 ..……..... 0 9,700 970.00 +12% 39,475 4,543.00 +22% 84,200 14,382.50 +24% 160,725 32,748.50 +32% 204,100 46,628.50 + 35% 510,300 153,798.50 + 37% Married filing jointly or Qualifying widow(er)- Schedule Y-1 If taxable But not over- $ 19,400 78,950 168,400 321,450 408,200 612,350 $ The tax is: $ .........10% The tax is: .........10% 1,940.00 +12% 9,086.00 +22% 28,765.00 +24% 2019 Tax Rate Schedules 65,497.00+ 32% 93,257.00+ 35% 164,709.50 + 37% of the amount over- $ 0 9,700 39,475 84,200 160,725 204,100 510,300 of the amount over- $ 0 19,400 78,950 168,400 321,450 408,200 612,350 Head of household-Schedule Z If taxable income is: Over- $ 0 If taxable income is: Over- $ But not over- 0 9,700 39,475 84,200 160,725 204,100 306,175 $ 13,850 52,850 84,200 160,700 204,100 510,300 .........10% 13,850 $ 1,385.00 + 12% 52,850 6,065.00 +22% 84,200 12,962.00 +24% 160,700 31,322.00 + 32% 204,100 45,210.00 + 35% 510,300 152,380.00 + 37% Married filing separately-Schedule Y-2 .... But not over- $ 9,700 39,475 84,200 160,725 204,100 306,175 The tax is: The tax is: .........10% 970.00 +12% 4,543.00 +22% 14,382.50 +24% 32,748.50 + 32% 46,628.50 + 35% 82,354.75 +37% $ of the amount over- $ 0 13,850 52,850 84,200 160,700 204,100 510,300 $ of the amount over- 0 9,700 39,475 84,200 160,725 204,100 306,175

Answer rating: 100% (QA)

QBI Deduction 9800 Tax Liability 4510 Explanation Given Net income 61200 ... View the full answer