Question

The ceiling amounts and percentages for 2015 for the two portions of the self-employment tax are:

Social Security portion Medicare portion
a. $118,500; 12.4% Unlimited; 2.9%
b. $118,500; 15.3% Unlimited; 2.9%
c. $117,000; 12.4% Unlimited; 2.9%
d. $117,000; 2.9% Unlimited; 13.3%
e. None of the above.

Answer 1

The self-employment tax consists of the Social Security portion and the Medicare portion. For 2015, the ceiling amount for Social Security is $118,500 with a tax rate of 12.4%, while the Medicare portion has no ceiling and a tax rate of 2.9%.

Step-by-step explanation:

The self-employment tax consists of two portions: the Social Security portion and the Medicare portion.

For the Social Security portion, the ceiling amount for 2015 is $118,500, which means that only income up to this limit is subject to the tax. The tax rate for this portion is 12.4%.

For the Medicare portion, there is no ceiling amount, so all income is subject to the tax. The tax rate for this portion is 2.9%.

Therefore, the correct answer is (a) $118,500; 12.4% Unlimited; 2.9%.