Alice is single and self-employed in 2019. Her net business profit on her Schedule C for the year is $150,000. What is her self-employment tax liability and additional Medicare tax liability for 2019?

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Business

Ayden Poole

7 October, 21:30

Alice is single and self-employed in 2019. Her net business profit on her Schedule C for the year is $150,000. What is her self-employment tax liability and additional Medicare tax liability for 2019?

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Adison Maynard · Answer 1

Answer: Her total tax liability is $19,790.23

Explanation:

In calculating Alice's self employment tax liability and medicare tax liability, her net business profit from Schedule C is multiplied by 92.35%.

$150,000 x 92.35% = $138,525.

Being that the maximum taxable amount is $127,200, Alice will owe $127,200 x 12.4% = $15,772.80 in Social Security taxes and

$4,017.23 ($138,525 x 2.9%) for the Medicare component of FICA taxes.

Therefore, the total self-employment tax is $19,790.03 ($15,772.80 + $4,017.23).