Question

For each of the following individuals, calculate the applicable self-employment tax. Assume that each individual files tax returns under Married Filing Jointly status.

NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation.

1:Annabelle Jefferson earns net self-employment income of $68,400. She does not work a second job.

Self-Employment tax =

2:Alexander Ryan earns net self-employment income of $117,800. He works a second job from which he receives FICA taxable earnings of $50,500.

Self-Employment tax =

3:Morgan Cruise earns net self-employment income of $223,400. She works a second job from which she receives FICA taxable earnings of $109,400.00.

Self-Employment tax =

Answer 1

1	Self employment Income	$         68,400
	Social security tax [68400*12.4%]	$           8,482
	Medicare tax [68400*2.9%]	$           1,984
		$         10,465
2	Self employment Income	$      117,800
	Social security tax [117800*12.4%]	$         14,607
	Medicare tax [117800*2.9%]	$           3,416
		$         18,023
	FICA Income	$         50,500
	Social security tax [117800*6.2%]	$           3,131
	Medicare tax [117800*1.45%]	$               732
		$           3,863
3	Self employment Income	$      223,400
	Social security tax [223400*12.4%]	$         27,702
	Medicare tax [223400*2.9%]	$           6,479
		$         34,180
	FICA Income	$      109,400
	Social security tax [109400*6.2%]	$           6,783
	Medicare tax [109400*1.45%]	$           1,586
		$           8,369