Which of the following factors limits the qualified business income (QBI) deduction?

The qualified business income (QBI) deduction is designed to allow eligible taxpayers to deduct a portion of their qualified business income from pass-through entities, which can be beneficial for their overall tax liability. One of the crucial factors that limits the QBI deduction is the amount of W-2 wages paid by the business.

The deduction can be limited based on a threshold that takes into consideration the total amount of W-2 wages paid by the business. If a taxpayer's income exceeds a certain threshold, then the QBI deduction can be limited to either 20% of QBI or a percentage of the W-2 wages paid. This means that if a business does not pay sufficient W-2 wages, it may reduce the allowable QBI deduction, thus directly impacting the overall tax benefit.

This aspect of the deduction aims to ensure that businesses that contribute to the workforce can receive greater benefits through their deductions, encouraging the employment of workers. Other options, such as filing status or the standard deduction, do not directly limit the QBI deduction in the same manner and are not tied to a calculation based on the business’s operations and workforce expenditures. Tax bracket may impact an individual's overall tax rate but does not specifically limit the QBI deduction itself.