Question

The ceiling amounts and percentages for 2019 for the two portions of the self-employment tax are:

Social Security portion

Medicare portion

a.

$132,900; 15.3%Unlimited; 2.9%

b.

$132,900; 12.4%Unlimited; 2.9%

c.

$128,400; 12.4%Unlimited; 2.9%

d.

$128,400; 2.9%Unlimited; 13.3%

Answer 1

Answer- b.The ceiling amount is $ 132900 and percentage for 2019 for the social security portion is 12.4% unlimited and Medicare portion is 2.9 %.

The self employed persons FICA tax rate for 2019 (January 1 through December 31st 2019 )is 15.3% on the first $ 132900 of net income Plus 2.9% on the net income in excess of $132900 . in other words, the self employed persons FICA tax rate for 2019 include all of the following:-

1.Both the employees and employer's portion of the social security tax, which is 6.2 % each of the first $ 132900 of net income. ( i.e. 6.2 % * 2 = 12.4% of $ 132900.)

2. Both employees and employer's portion of the Medicare tax, which is 1.45% each of all net income. ( no cap or limit on the net income ).

i.e. 1.45% * 2 = 2.9 %