Final answer:
Gus's quarterly estimated tax payment as a self-employed individual will be $4,225.76, which includes both income tax and self-employment taxes (Social Security and Medicare).
Step-by-step explanation:
To calculate the quarterly estimated tax payment for Gus, who is self-employed, we need to account for both income tax and self-employment taxes which include Social Security and Medicare. First, we'll calculate his total expected income tax by multiplying his annual earnings by the income tax rate: $49,280.00 × 19% = $9,363.20. Since there are four quarters in a year, the quarterly income tax payment is $9,363.20 / 4 = $2,340.80. Next, we'll calculate the Social Security and Medicare taxes. The Social Security tax is 12.4% of wages up to $128,400, so Gus will pay 12.4% of his annual earnings: $49,280.00 × 12.4% = $6,111.52. The Medicare tax is 2.9% of all wages, with no wage limit: $49,280.00 × 2.9% = $1,429.12. Adding these two gives us $6,111.52 + $1,429.12 = $7,540.64 annually. To find the quarterly payment for these, we divide by four: $7,540.64 / 4 = $1,885.16. Now, we add the quarterly income tax payment and the Social Security and Medicare payment to get Gus's total quarterly tax payment: $2,340.80 + $1,885.16 = $4,225.96. Thus, the correct answer is C. $4,225.76.