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In 2017, Landon has self-employment earnings of $195,000. Compute Landon’s self-employment tax liability and the allowable...

In 2017, Landon has self-employment earnings of $195,000. Compute Landon’s self-employment tax liability and the allowable income tax deduction of the self-employment tax paid.

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Expert Solution

Self-Employment Tax


$195,000 x .9235 = $180,083

                             

Deduction FOR AGI

FICA Social security limit    $117,000 x 12.40%    = $ 14,508

Medicare $180,083 x 2.9%                               = $   5,222

Self-employment tax                                          = $ 19,730

Deduction FOR AGI   $19730 x 50%                   = $   9,865

ekkarill92 answered 1 year ago
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