Rachel Is an Accountant Who Practices as a Sole Proprietor

question 43

Essay

Rachel is an accountant who practices as a sole proprietor. This year, Rachel had net business income of $200,000 (net of the deduction for self-employment taxes, the self-employed health insurance deduction, and the deduction for contributions to qualified self-employment retirement plans)from her practice. Assume that Rachel pays $50,000 wages to her employees, she has $20,000 of property (unadjusted basis of equipment she purchased last year),she has no capital gains, her taxable income before the deduction for qualified business income is $140,000, and she is unmarried. Calculate Rachel's deduction for qualified business income.

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Definitions:

Executive Members

Individuals who are part of a group's leadership, responsible for making decisions and governing the organization.

Constitution

The system of fundamental principles according to which a nation, state, corporation, or the like, is governed.

Communication Structure

The organized pattern or framework that dictates how information is exchanged and processed within a group or system.

Voting Rules

The set of regulations that govern the process of voting in elections or decision-making entities.