Question

Alice is single and self-employed in 2019. Her net business profit on her Schedule C for the year is $200,000. What is her self-employment tax liability and additional Medicare tax liability for 2019? (Round your final answer to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.) $ 21,129 Self-employment tax liability Additional medicare tax liability

Answer 1

Answer:

For self-employed FICA tax rate for 2019 is 15.3% on the first $132,900 of net income plus 2.9% on the net income in excess of $132,900.

The threshold for additional medicare tax liability of 0.9% is $200,000.

As such:

Income subject to Self employment tax liability = 200000 * 92.35% = $184,700

Self employment tax liability = 132900 * 15.3% + (184700 - 132900) * 2.9% = $21,836

Additional medicare tax liability = $0

$ 21,836 Self-employment tax liability Additional medicare tax liability