Question

What are the maximum cost recovery deductions for Esys Answers for year 1 and year 2?

Answer 1

The maximum cost recovery deductions for Esys Answers for year 1 and year 2 can be calculated based on the provided information.

Step-by-step explanation:

The maximum cost recovery deductions for Esys Answers for year 1 and year 2 can be calculated based on the provided information. We need to determine the gross annual income first. Let's say the gross annual income for year 1 is $50,000.

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3. Calculate the Social Security deduction: $50,000 * 6.2% = $3,100
4. 
   
6. Calculate the Medicare deduction: $50,000 * 1.45% = $725
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9. Calculate the federal and state taxes: $50,000 * 15% = $7,500

Now, we can calculate the maximum cost recovery deductions:

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3. Year 1: $3,100 + $725 + $7,500 = $11,325
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6. Year 2: The same formula can be used with the gross annual income for year 2 to calculate the deductions.