Eva received $60,000 in compensation payments from JAZZ Corp. during 2019. Eva incurred $5,000 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 2019 Tax Rate Schedule for reference.
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?
Assume that Eva is considered to be a self-employed contractor. What is her regular tax liability for the year?
The self-employment tax rate is 15.3% in 2019. That rate is the sum of a 12.4% Social Security tax and a 2.9% Medicare tax. Self-employment tax applies to net earnings.
Net Earnings = $.60,000 x 92.35% = $ 55,410
So,
self-employment tax liability = $ 55,410 x 12.4% = $6870.84
and
additional Medicare tax liability for the year = $ 55,410 x 2.9% = $1606.89
Regular Tax Liability :
Eva received compensation for the Year = $60,000
Standard deduction = $12,200
Taxable Income for the Year = $47,800
Tax Brackets and Rates, 2019
Rate | For Unmarried Individuals, Taxable Income Over | |
10 | $0 | |
12 |
|
|
22 | $39,475 | |
24 | $84,200 | |
32 | $160,725 | |
35 | $204,100 | |
37 | $510,300 |
So,
Eva's Regular Tax liability for the Year 2019 = $7,538.50
- | 9,700 | 10 | 970.00 |
9,700 | 39,475 | 12 | 4,737.00 |
39,475 | 8,325 | 22 | 1,831.50 |
7,538.50 |
Eva received $60,000 in compensation payments from JAZZ Corp. during 2019. Eva incurred $5,000 in business...
Eva received $60,000 in compensation payments from JAZZ Corp. during 2018. Eva incurred $5,000 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 $12,000. 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...
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Eva received $63,000 in compensation payments from JAZZ Corp. during 2018. Eva incurred $11,000 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 $12,000. Based on these facts answer the following questions: 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...
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