What is the total tax due for 2020, for Stuart, assuming that he earned 20,000 in...

What is the total tax due for 2020, for Stuart, assuming that he earned 20,000 in wages, earned 24,000 in self-employment income from his first business, had a loss of 10,000 from his second business, received 3,000 of interest income, and had 5,100 in nonqualified dividend income?

Expert Solution

Below is the taxable income and tax computation for Stuart for 2020

Computation of Tax on Total Income of Stuart for 2020

Particulars		Amount
Wages		20,000.00
Self-Employment Income	24,000.00
Less: Self-Employment Loss	(10,000.00)
		14,000.00

Interest Income		3,000.00
Dividend Income		5,100.00

		42,100.00

Less: Employer Portion of Self-Employment Tax @ 7.65%		1,071.00

Adjusted Gross Income		41,029.00

Less: Standard Deduction		(12,400.00)

Net Taxable Income		28,629.00

Tax on Taxable Income		3,237.86
Self-Employment Tax
(24,000 - 10,000) * 92.35% * 15.3%		1,978.14

Total Tax for 2020		5,216.00

ekkarill92 answered 1 year ago

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