. Assume the taxpayer is self-employed. Which of the following statements is incorrect?
. If taxable income is $100,000 and business profit is $70,000, the taxpayer is eligible for qualified business income deduction (QBID).
. If the average annual gross receipts for the last 3 years are $22 million, the taxpayer can claim the full amount of deduction on business interest expense.
. Individual retirement account (IRA) contribution (where the amount is $1,000) can be claimed as deduction for AGI.
. Interest on student loans where the taxpayer is single and has MAGI of $90,000 is not deductible.
. Self-employed taxpayer pays 15.3% self-employment tax (= 12.4% Social Security tax + 2.9% Medicare tax) on all of the business income, and will claim 50% of the self-employment tax as deduction for AGI.