In 2019,William Wallace's sole proprietorship,Western Wear Apparel,generated $162,426 Schedule C net profit ($150,000 net earnings from self-employment).In addition,William recognized a $25,000 Section 1231 gain on a sale of land formerly used by the business as a parking lot.The business checking account earned $250 interest income.William qualifies for the QBI deduction without regard to the wage or taxable income limitations.
a.Which of these income items are subject to self-employment tax?
b.Compute William's 2019 self-employment tax,assuming he has no other earned income.
c.Compute the total increase in William's 2019 taxable income attributable to his business.

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The Answer of In 2019,William Wallace's sole proprietorship,Western Wear Apparel,generated $162,426 Schedule C net profit ($150,000 net earnings from self-employment).In addition,William recognized a $25,000 Section 1231 gain on a sale of land formerly used by the business as a parking lot.The business checking account earned $250 interest income.William qualifies for the QBI deduction without regard to the wage or taxable income limitations.
a.Which of these income items are subject to self-employment tax?
b.Compute William's 2019 self-employment tax,assuming he has no other earned income.
c.Compute the total increase in William's 2019 taxable income attributable to his business.

In 2019,William Wallace's Sole Proprietorship,Western Wear Apparel,generated $162,426 Schedule C