Kiyara (single) is a 50 percent shareholder of Jazz Corporation (an S Corporation). Kiyara does not do any work for Jazz Corp. Jazz Corp. reported $350,000 of business income for the year (2020). Before considering her business income allocation from Jazz Corp. and the self-employment tax deduction (if any), Kiyara’s adjusted gross income was $300,000 (all employee salary). Answer the following questions for Kiyara. 

Assuming the income allocated to Kiyara is qualified business income, what is Kiyara’s deduction for qualified business income? What is Kiyara’s additional Medicare tax liability (include all earned income)?

Answer rating: 100% (QA)

Answer 1 Kiyaras share of income from S corporation 350000 50 175000 Max Qualified business deduction 350000 20 70000 The qualified business income de... View the full answer