Rachel Is an Accountant Who Practices as a Sole Proprietor

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The Answer is $28,000.
Since Rachel has taxable income of $140,000 (before the deduction for qualified business income), and below $160,700, her accounting would not be considered a specified service or trade business.Thus, she is eligible for the deduction for qualified business income.Because her taxable income is below $160,700, the wage limitation would not apply.Thus, her deduction is $28,000, the lesser of (a)$40,000 (20 percent of her qualified business income, 20% × $200,000)or (b)$28,000 (20 percent of her taxable income before the deduction, 20% × $140,000).

Rachel Is an Accountant Who Practices as a Sole Proprietor

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Rachel Is an Accountant Who Practices as a Sole Proprietor

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