What is the amount of self-employment tax that would be paid by Andy for the yea

Question

What is the amount of self-employment tax that would be paid by Andy for the year assuming he earned $104,600 while working as an employee of Car Company, $3,000 in interest, $2,500 in dividends and an additional $25,000 from a sales business he owns? What is the amount of self-employment tax that would be paid by Andy for the year assuming he earned $104,600 while working as an employee of Car Company, $3,000 in interest, $2,500 in dividends and an additional $25,000 from a sales business he owns? What is the amount of self-employment tax that would be paid by Andy for the year assuming he earned $104,600 while working as an employee of Car Company, $3,000 in interest, $2,500 in dividends and an additional $25,000 from a sales business he owns?

Explanation / Answer

Solution:

Calculation of the Amount of Self Employment tax of Andy:

Maximum subject to OASDI self-employment tax $127,200.00 Less: Income subject to social security $104,600.00 Amount subject to OASDI self-employment tax $22,600.00 OASDI self-employment tax rate 15.30% OASDI self-employment tax $3,458.00 HI net earnings from self-employment $23,088.00 HI self-employment tax rate 2.9% HI self-employment tax $669.55 OASDI self-employment tax $3,458.00 HI self-employment tax $669.55 Total self-employment tax $4,127.55

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