Respuesta :
a) If Eva is deemed an employee, she will be responsible for paying $4,590 in FICA taxes for the entire year.
b) Eva's ordinary income tax obligation for the year is $6,141 if she is assumed to be an employee.
c) Given that Extra Medicare is only levied if a single filer's income exceeds $200,000 and Eva is assumed to be a self-employed contractor, her self-employment tax due is $7,771. Her additional Medicare tax liability for the year is zero.
d) According to this scenario, Eva's regular tax obligation for the year is $3,466 if she is considered a self-employed contractor.
Tax liability is the sum subtracted from the individual's income. Every fiscal year, every person owes taxes to the government based on their tax brackets. It is calculated based on taxpayers' taxable income.
a)
However, FICA tax rates have stayed the same throughout the last few decades. Therefore, for a total FICA contribution of 15.3%, the employer and employee each contribute 7.65% of their income. You can multiply your gross pay by 7.65% to determine how much FICA tax you must pay.
So, For the employee portion of the income, FICA taxes are 7.65%.
FICA tax = Â $60,000 * .0765 = $4,590
b)
Income                 $60,000
Less: Standard Deduction  -12,950
Taxable Income          $47,050
Tax liability                $6,141
Tax liability = $4,617.50 + ($47,050 - 40,125 at 22% over $40,125)
= $4,617.50 + ($6925 * .22)
= $4,617.50 + 1,523.50 = $6,141
Self-employment tax is 15.3% and consists of 1.45%+1.45% of both employee and employer Medicare tax and 6.20%+6.20% of both employee and employer Social Security tax.
c)
Self-employment income $7,771
Additional Medicare tax liability $0
Self-employment tax is 15.3% on 92.35% of self-employment income
Income                                        $60,000
Less: Business expense                           -5,000
Net Income                                     $55,000           Â
92.35% of self-employment income ($55,000 * .9235) Â Â $50,792.5
Self-employment tax ($50,793 * .153 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $7,771
Extra Medicare is only taxed if a single filer's income exceeds $200,000. An additional Medicare tax is levied at a rate of 0.9%.
d.
Income                                             $60,000
Less: Business Expense                              -55,000
Net Income                                         $55,000
Deduction for AGI Â (7.55% of 92.35% of AGI) Â Â Â Â Â Â Â Â Â Â Â Â Â Â -3,886
AGI Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 51,114
Less: Standard deduction                               -12,950
Gross Taxable income before QBI deduction                38,164
QBI deduction ($38,714 * .20 = $7,743) Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â -7,633
Net taxable income                                    30,531
Tax liability                                             3466
WORKING NOTE:
The employer portion of the self-employment tax is 7.65%.
AGI deduction = $(55,000 * .9235) * .0765
AGI Deduction = $50,793 * .0765 = $3,886
Less than 20% of net self-employment income is deducted for QBI.
QBI Deduction = $38,714 * .20 = $7,633
Tax liability = $987.50 + ($30,531 - 9,875 at 12% over $9,875)
Tax Liability = $987.50 + ($20,656 * .12) = 987.50 + 2478.72
Tax Liability = $3,466.2 ≅ $3,466
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