(7) 199A

1. What is " qualified 2. Deduction Amount 3. Apply after SD, in addition to it

business income?" Only 20% of QIB if other wages, too. (or BTL, if applicable).
Phase-In b/w
Income in Trade and 157,500 & 207,500
Business from sole (a) If significant other wages:
propreitorship PASS IFF Naughty List Deduct: 20% of QIB income (net
THROUGH taxation. -> Ie Uber (b) but TI is less income -> includes gains, losses,
driver. than 157,500 + minus expenses).
50k -> then.
Excludes:
(a) Income as employee; (1) Calculate "app.
(b) If insignificant wages:
percent". [(TI -
Deduct: 20% taxable income
(b) IF income is > $157k (314 157,500) /
(post BTL/SD).
married) -> phase in health, (50,000)].
law, accounting, actuarial, (2) Multiply QBI by
performing arts, consulting, the "app. percent."
athetics, financial services, (3) Take this Example A: Uber Example B: Uber
brokerage services, or other portio of driver makes $55k in driver makes
job where skill of 1 or more deduciton and cash; spends $5k on $55k in cash,
employees is principal asset continue. . gas/uber expenses. spends $5k on
Also makes 40k in gas/uber
(c) IF income > 207,500 (2x regular wages as expenses. Makes
for joint) then COMPLETLEY employee. no wages as
excluded as a "naughty lister" employee.
1. QIB = (55 - 5) =
[engineers and architechts are 50k; 1. QIB = (55 - 5)
fine]. 2. 199A = QIB x .2 = = 50k.
Full deduciton 10k; 2. 199A = QIB x
cannot be more 3. Taxable income = .2 =10k.
than 50% of W-2 Adjst Gross. (90k) - 3. TI = 50k - 12k
wages for these (12k) standard btl = = 38k
people. 78k. 4. TI x .2 = 7,600
4. TI x .2 = 15.6k. 5. 10k > 7.6k
High-Income Taxpayers 5. 10k < 15.6k. TAKE TAKE 7.6k. from
(naughty list $$ thres, but for 10k. from TI. TI.
all people) MUST have
employees or depreciable
property to take advantage of
this.