67.2k views
3 votes
During the year, Eleanor earns $120,000 in wages as an employee of an accounting firm. She also earns $30,000 in gross income from an outside consulting service she operates. Deductible expenses paid in connection with the consulting service amount to $6,000. Eleanor also has a recognized long-term capital gain of $1,000 from the sale of a stock investment. She must pay a self-employment tax on:

a. $145,000
b. $144,000.
c. $31,000.
d. $30,000.
e. $24,000.

User LobsterBaz
by
7.5k points

1 Answer

5 votes

Answer:

Self employment tax will be $24000

So option (e) will be correct option

Step-by-step explanation:

We have given that earning from outside consulting service = $30000

Deductible amount paid in connection with consulting service = $6000

We have to find the self employment tax

Self employment tax is the difference of earning from outside source and deductible amount

So self employment tax = $30000 - $6000 = $24000

So option (e) will be correct option

User Dmytro Danevskyi
by
8.8k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.