Through November, Cameron has received gross income of $80,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,760 of revenue at a cost to Cameron of $4,100, which is deductible for AGI. In contrast, engagement 2 will generate $9,250 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (5) Greater of itemized deductions or standard deduction (6) Deduction for QBI Taxable income Engagement 1 Engagement 2
Through November, Cameron has received gross income of $80,000. For December, Cameron is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,760 of revenue at a cost to Cameron of $4,100, which is deductible for AGI. In contrast, engagement 2 will generate $9,250 of qualified business income (QBI), which is eligible for the 20 percent QBI deduction. Cameron files as a single taxpayer. Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has no itemized deductions. Description (1) Gross income before new work engagement (2) Income from engagement (3) Additional for AGI deduction (4) Adjusted gross income (5) Greater of itemized deductions or standard deduction (6) Deduction for QBI Taxable income Engagement 1 Engagement 2
Chapter6: Business Expenses
Section: Chapter Questions
Problem 82TA
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Question
Transcribed Image Text:Through November, Cameron has received gross income of $80,000. For December, Cameron is considering whether to accept one
more work engagement for the year. Engagement 1 will generate $7,760 of revenue at a cost to Cameron of $4,100, which is
deductible for AGI. In contrast, engagement 2 will generate $9,250 of qualified business income (QBI), which is eligible for the 20
percent QBI deduction. Cameron files as a single taxpayer.
Calculate Cameron's taxable income assuming he chooses engagement 1 and assuming he chooses engagement 2. Assume he has
no itemized deductions.
Description
(1) Gross income before new work engagement
(2) Income from engagement
(3) Additional for AGI deduction
(4) Adjusted gross income
(5) Greater of itemized deductions or standard deduction
(6) Deduction for QBI
Taxable income
Engagement 1 Engagement 2
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