Question

Eva received $66,000 in compensation payments from JAZZ Corp. during 2019. Eva incurred $12,500 in business expenses relating to her work for JAZZ Corp. JAZZ did not reimburse Eva for any of these expenses. Eva is single and she deducts a standard deduction of $12,200. Based on these facts answer the following questions: Use Tax Rate Schedule for reference. a. Assume that Eva is considered to be an employee. What amount of FICA taxes is she required to pay for the year? (Round your final answer to the nearest whole dollar amount.) Amount of FICA taxes b. Assume that Eva is considered to be an employee. What is her regular income tax liability for the year? (Round your final answer to 2 decimal places.) Regular tax liability C. Assume that Eva is considered to be a self-employed contractor. What is her self-employment tax liability and additional Medicare tax liability for the year? (Round your intermediate computations & final answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.) Self-employment tax liability Additional medicare tax liability d. Assume that Eva is considered to be a self-employed contractor. What is her regular tax liability for the year? (Round your intermediate computations and final answer to the nearest whole dollar amount.) Regular tax liability

2019 Tax Rate Schedules

Individuals

Schedule X-Single

If taxable income is over:	But not over:	The tax is:
$           0	$    9,700	10% of taxable income
$    9,700	$ 39,475	$970 plus 12% of the excess over $9,700
$ 39,475	$ 84,200	$4,543 plus 22% of the excess over $39,475
$ 84,200	$160,725	$14,382.50 plus 24% of the excess over $84,200
$160,725	$204,100	$32,748.50 plus 32% of the excess over $160,725
$204,100	$510,300	$46,628.50 plus 35% of the excess over $204,100
$510,300	—	$153,798.50 plus 37% of the excess over $510,300

Schedule Y-1-Married Filing Jointly or Qualifying Widow(er)

If taxable income is over:	But not over:	The tax is:
$           0	$ 19,400	10% of taxable income
$ 19,400	$ 78,950	$1,940 plus 12% of the excess over $19,400
$ 78,950	$168,400	$9,086 plus 22% of the excess over $78,950
$168,400	$321,450	$28,765 plus 24% of the excess over $168,400
$321,450	$408,200	$65,497 plus 32% of the excess over $321,450
$408,200	$612,350	$93,257 plus 35% of the excess over $408,200
$612,350	—	$164,709.50 plus 37% of the excess over $612,350

Schedule Z-Head of Household

If taxable income is over:	But not over:	The tax is:
$           0	$ 13,850	10% of taxable income
$ 13,850	$ 52,850	$1,385 plus 12% of the excess over $13,850
$ 52,850	$ 84,200	$6,065 plus 22% of the excess over $52,850
$ 84,200	$160,700	$12,962 plus 24% of the excess over $84,200
$160,700	$204,100	$31,322 plus 32% of the excess over $160,700
$204,100	$510,300	$45,210 plus 35% of the excess over $204,100
$510,300	—	$152,380 plus 37% of the excess over $510,300

Schedule Y-2-Married Filing Separately

If taxable income is over:	But not over:	The tax is:
$           0	$    9,700	10% of taxable income
$    9,700	$ 39,475	$970 plus 12% of the excess over $9,700
$ 39,475	$ 84,200	$4,543 plus 22% of the excess over $39,475
$ 84,200	$160,725	$14,382.50 plus 24% of the excess over $84,200
$160,725	$204,100	$32,748.50 plus 32% of the excess over $160,725
$204,100	$306,175	$46,628.50 plus 35% of the excess over $204,100
$306,175	—	$82,354.75 plus 37% of the excess over $306,175

Answer 1

Part A

Amount of FICA Taxes

$5049

$66,000 × 7.65% = $5049

Part B

Regular tax liability

$7695

Description	Amount	Explanation
(1) Salary	66000
(2) Standard deduction	(12200)
(3) Taxable income	53800	(1) + (2)
Regular tax liability	$7695	4543 + (22%*(53800-39475))

Part C

Self-employment tax liability	$7559
Additional Medicare tax liability	$0

Description	Amount	Explanation
(1) Gross self-employment compensation	66000
(2) Business expenses	(12500)
(3) Net self-employment (Schedule C) income	53500	(1) + (2)
(4) Percentage of self-employment income subject to self-employment tax	92.35%
(5) Earnings from self-employment	49407	(3) × (4)
(6) Self-employment tax rate	15.3%
(7) Self-employment tax liability	$7559	(5) × (6)

Part D

Regular tax liability

$4308

Description	Amount	Explanation
(1) Gross self-employment compensation	66000
(2) Business expenses	(12500)
(3) Net self-employment (Schedule C) income	53500	(1) + (2)
(4) For AGI deduction for employer portion of self-employment taxes	(3780)	53500 x 92.35%*50%
(5) AGI	49720	(3) – (4)
(6) Standard deduction	12200
(7) Taxable income	37520	(5) – (6)
Regular tax liability	$4308	970+(12%*(37520-9700))