Question

Kyle, a single taxpayer, worked as a free-lance software engineer for the first three months of 2018. During that time, he earned $44,000 of self-employment income. On April 1, 2018, Kyle took a job as a full-time software engineer with one of his former clients, Hoogle Inc. From April through the end of the year, Kyle earned $178,000 in salary.

What amount of FICA taxes (self-employment and employment related) does Kyle owe for the year? (Round your intermediate calculations to the nearest whole dollar amount.)

Self Employement/FICA tax

THIS IS FOR 2018

Answer 1

	Description	Amount	Remarks
1	Social Security tax paid as an employee [lesser of [(a) $178,000 wages or (b)$128,400 maximum base] × 6.2%	$      7,960.80	128400*6.2%
2	Social Security wage base limit less employee compensation subject to Social Security tax	$                   -	$128,400 − $128,400, limited to $0
3	Net earnings from self-employment	$    40,634.00	$44,000*92.35%
4	Social Security portion of self-employment tax	$                   -	Lesser of [Step (2) or (3)] × 12.4%
5	Employer portion of Medicare tax for self employment tax purposes	$          589.19	Step (3) × 1.45%
6	Sum of taxpayer’s compensation and netearnings from self-employment	$ 218,634.00	$178,000 + Step (3)
7	Lesser of [Step (6) amount or $200,000] ×1.45%	$      2,900.00	200,000 × 1.45%
8	Greater of [(a) zero or (b) the amount from Step (6) minus $200,000] × 2.35%.	$          437.90	(218634-200,000)*2.35%
9	Employee portion of Medicare tax	$      3,337.90	Step (7) +Step (8)
10	Total FICA taxes owed for year	$    11,887.89	Steps (1) + (4) + (5) + (9)