Rich (SSN 432-43-2534) Jones works as a charter fisherman in Seaside. In 2019 he collected $200,000 from customers for charter fees. He paid 100,000 for his boat three years ago (1/15/2017) and has depreciated it using the MACRS 200% method. Expenses he incurred operating his fishing boat were:

Gas........................................$40,000

Crew Salary...........................$35,000

Boat Maintenance...............$15,000

Bait..........................................$5,000

Boat Insurance.......................$5,000

Beer and ice for customers...$1,000

Beer for captain and crew.....$2,500

Business Tax and License......$1,000

Rich also received $20,000 in tips from happy customers, which he split evenly with his crewmember Mack. Sometimes customers could not take all of the fish they caught home, in which case Rich sold the fish to local restaurants. Sales of the fish totaled $16,000. Rich was not sure how much tax he owed on his income and was even more confused by the self-employment tax. He decided to make a payment of $30,000 on June 15, 2019 for the entire year and hoped it was enough.

WHAT IS QBI & SELF EMPLOYMENT TAX? PLEASE SHOW WORK.

Answer rating: 100% (QA)

QBI In 2019 I collected 200000 from customers for charter fees I paid 100000 for my boat three years ... View the full answer