Question

QUESTION 43

1. Realizing that providing for a comfortable retirement is up to them, Jim and Julie commit to making regular contributions to their IRAs, beginning this year. Consequently, they each make a $2,000 contribution to their traditional IRA. The maximum credit percentage rate for taxpayers filing a joint return applies for AGI between 0 and $38,500. If Jim and Julie's AGI is $35,000 on their joint return, what is the amount of their credit for certain retirement plan contributions?

   	a.	$2,000
   	b.	$400
   	c.	$200
   	d.	$1,000

QUESTION 44

1. Pat generated self-employment income in 2018 of $76,000. The self-employment tax is:

   	a.	$0
   	b.	$5,369.23
   	c.	$11,628
   	d.	$10,738.46

Answer 1

43

Married filing jointly with a spouse who is not covered by a plan at work

any amount

A full deduction up to the amount of your contribution limit

Deduction $ 2000

44.

If you have net income — your business income less expenses — of at least $400, that amount is subject to the 15.3 percent self-employment tax.

That levy comprises a 12.4 percent Social Security tax and 2.9 percent Medicare tax and applies to income up to $128,400 in 2018 (up from $127,200 in 2017).

76000 * 15.3% = $11,628