Key Facts: Joint filer with a Schedule C business has a standard deduction
of $ 24,000 Business gross income
of $ 130,000 Business expenses
of $ 30,000 Net
profit from business $ 100,000 (qualified business income) Spouse works and makes $ 70,000 Above - the - line deductions
of $ 7,500 for deductible
portion of self - employment tax and $ 20,000 for SEP IRA contribution Analysis: Taxable income before application
of pass - through deduction = $ 118,500 In this case, the taxable income
of $ 118,500 is
greater than the qualified business income
of $ 100,000.