Question

Stewart Beauf is a self-employed surfboard maker in 2018. His Schedule C net income is $125,003 for the year. He also has a part-time job and earns $15,600 in wages subject to FICA taxes.

Calculate Stewart’s self-employment tax for 2018 using Schedule SE.

If required, round amounts to the nearest dollar. Enter all amounts as positive numbers. If a line item does not require an entry or the answer is zero, enter "0".

Answer 1

It will pay 17.411,86 dollar for FICA taxes as self-employed

Step-by-step explanation:

On 2018 the base for FICA taxes was 128,700 dollars

during the year we have income for:

125,000 + 15,600 = 140,600

As it is above the base our sel-employement taxes will be halved by:

140,600 - 128,700 = 11,900

Now:

The self-employees will contribute the FICA taxes "twice" as they act like employee and employers

125,003 - 11,900 = 113.103

so, if medicare is 1.45% and OASDI 6.2%

the self-employed person will pay double this rates:

OASDI

113.103 x (0.062*2) = 14.024,772‬

MEDICARE

113.103 x (0.0145*2) = 3.279,987‬

FOR MEDICARE, as we exceed we pay the additional 0.9% for that amount

11,900 x 0.9% = 107,1

Total FICA taxes from self-employed: 17.411,859‬

Total FICA taxes_ 19.125,459‬