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Scenario $1$: High Earner, Significant Business Income

Wages: Sarah $($$$115,000),$ William $($$$20,000)$

Qualified Business Income: William $($$$85,000)$

Itemized Deductions: $$31,000($including mortgage interest and state taxes$)$

Allowable deduction for self$-$employment tax: $$6,800$

Calculate AGI and taxable income. Consider the potential impact of income phase$-$outs for certain deductions and credits.

Scenario $2$: Investment Income and Itemized Deductions

Wages: Sarah $($$$62,000),$ William $($$$38,000)$

Qualified Business Income: William $($$$0)$

Dividend Income: $$12,000($qualified dividends$)$

Interest Income: $$3,500$

Itemized Deductions: $$36,000($including high medical expenses, charitable contributions, and casualty loss$)$

Allowable deduction for self$-$employment tax: $$0$

Calculate AGI and taxable income. Explore whether any of the itemized deductions might be limited$.$