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For 2019. Juanita, who is single and 45 years of age, received $50,000 in self-employment income...

For 2019. Juanita, who is single and 45 years of age, received $50,000 in self-employment income in 2019. What is her self- employment tax for the year?
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Answer #1

Self-employment is a tax that a small business owner must pay to the federal government to fund Medicare and social security. Self-employment tax s due when has net earnings of $400 or more. This tax is calculated and reported under IRS form 1040 Schedule SE.

Medicare tax rate is 2.9% and total self-employment tax rate is 12.4%+2.9% = 15.3% and it paid on 92.35% of net earnings.

Self-employment tax = 92.35% * USD 50,000 = USD 46,175 .

Tax liability = 15.3% * 46175 =USD 7064.77 or USD 7065

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