Question

so the threshold in my book says to use $128,400 and then it says to subtract the FICA amount from the threshold and then multiply that by the full tax rate of 15.3% and then the rest of her earnings by 2.9% and then add that up, it worked for the second question but for this one is keeps saying im wrong, plz show steps !

mercise 9 Completed 9 Out of 9 CALENDAR | CALCULATOR CHECK MY WORK SAVE ASSIGNMENT Sb 5-9 Calculate Self-Employment Tax or 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: Allison Wilson earns net self-employment income of $88,500. She does not work a second job. Self-Employment tax $ 13.540.50 2: Martin Hughes cams net self-employment income of $149.700. He works a second job from which he receives FICA taxable earnings of $95.000 Self-Employment tax $ 8,402.00 3: Elisa Grant earns net self-employment income of $196,400. She works a second job from which she receives FICA taxable canings of $74.800 X Self-Employment tax = $ 12.342.00 NEXT SUBMIT ASSIGNME PREVIOUS

Answer 1

Hi

Let me know in case you face any issue:

Solution: Year 2018 rules have been applied. Answer is highlighted in yellow: 2018 wage limit is $ 128400. As per Tax year 2018 wage limit, answer will be different for different year: Particulars b) Balance limit for self employment tax purpose c) Net earnings from self-employment d) Social Security portion of self-employment tax e) Employer portion of Medicare tax for self employment tax f) Sum of Salary and net earnings from self-employment h) Greater of [(1) zero or (2) the amount from Step (f) minus $250,000] x 0.9%. j) Self-employment Tax Amount Explanation $ 53,600.00 (128400-74800) 196400 $ 6,646.40 Lesser of (Step (b) or (c)] x 12.4% $ 5,695.60 (cx 2.9%) 271200.00 (74800+181375.50) $ 190.80 (271200 - 250000) * 0.9% $ 12,532.80 (a + d + e +i)