Checkpoint Assignment
ACCT 612
Problems:
1. Use Thomson Reuters Checkpoint to answer the following questions:
a. What does section 199a of the 2018 tax law give to business owners?
This tax law gives allowance of deduction to business owners. This law states that in
the case of a taxpayer other than a corporation, there shall be allowed as deduction for
any taxable year an amount equal to the lesser of the combined qualified business
income amount of the taxpayer, or an amount equal to 20% of the excess (if any) of
the taxable income of the taxpayer for the taxable year, over the net capital gain of the
taxpayer for such taxable year.
b. Define Qualified Business Income (QBI). Why is this important?
The term “qualified business income” means, for any taxable year, the net amount of
qualified items of income, gain, deduction, and loss with respect to any qualified
trade or business of the taxpayer. Such term shall not include any qualified REIT
dividends or qualified publicly traded partnership income. This is important because
for small businesses as it provides tax relief for those who do not operate as a C
corporation.
c. What are the threshold amounts that may constrain?
The term “threshold amount” means $157,500 (200% of such amount in the case of a
joint return). For a married couple that has filed a joint tax return, their threshold
amount is at $315,000. For all other taxpayers the threshold is $157,500. For
taxpayers whose income does not meet threshold amount are free from SSTB
limitations.
d. How do W2 wages constrain?
The amount determined under this paragraph with respect to any qualified trade or
business is the less of 20% of the taxpayer’s qualified business income with respect to
the qualified trade or business, or the greater of 50% of the W-2 wages with respect to
the qualified trade or business, or the sum of 25% of the W-52 wages with respect to
