Susan, a Single Taxpayer, Owns and Operates a Bakery (As

question 6

Essay

Susan, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not a specified services business. In 2018, the business pays $60,000 in W-2 wages, has $150,000 of qualified property, and $200,000 in net income (all of which is qualified business income). Susan also has a part-time job earning wages of $11,000, receives $3,000 of interest income, and will take the standard deduction. What is Susan's qualified busine income deduction?

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Definitions:

Carpet Industry

The sector of the economy specialized in the manufacture and sale of carpets and rugs.

Mills

Factories or plants that process and manufacture products from raw materials.

Marginal Returns

The additional output produced as a result of utilizing one more unit of input, which can decrease as more units are added.

Labor

The physical and mental effort used in the production of goods and services.