Question

Guy is self employed. In one year, Guy generates a gross income of $44,500. When calculating...

Guy is self employed. In one year, Guy generates a gross income of $44,500. When calculating his taxes, Guy is allowed to deduct $2,500 in expenses from his gross income (the result is his 'operating income'). Guy must then pay 10% tax on all operating income up to $20,000 and then 20% on any operating income over $20,000. Calculate the amount of tax that Guy must pay. Give your answer in dollars to the nearest dollar.
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Carl is a self-employed real estate agent. For the current year, his self-employment net earnings (revenues...
Carl is a self-employed real estate agent. For the current year, his self-employment net earnings (revenues minus expenses) are $80,000. He is also employed as an accountant with a gross salary of $70,000 for the year. Assume that the appropriate social security income ceiling for the year is $130,000 and that the self-employed FICA rates are 12.4% for social security and 2.9% for Medicare. What is Carl s self-employment tax liability for the year? $9,583 $10,901 $11,304 $12,240
Daniel is a self-employed consultant. Until this year he was always an employee. He comes to...
Daniel is a self-employed consultant. Until this year he was always an employee. He comes to discuss his new business with you. As his tax accountant, you should: A. Discuss all of the above B. Discuss the self-employment tax, as well as the income tax, on business earnings in order to help Daniel estimate what he might owe in taxes for the year C. Discuss setting up a good record-keeping system for his new business D. Discuss the substantiation requirements...
Colin, a self-employed consultant, uses a room of his home as a business office. This room...
Colin, a self-employed consultant, uses a room of his home as a business office. This room represents 10 percent of the home’s square footage. This year, Colin incurred the following expenses in connection with his home. Use Table 7-3 and Table 7-4. Home mortgage interest $ 12,980 Property tax on residence 2,200 Homeowner’s insurance 1,475 Utilities 2,100 Furnace repairs 300 Colin purchased the home in 2000 for $225,000. For MACRS depreciation purposes, he allocated $185,000 to the building and $40,000...
Lyn, a single, self-employed investment counselor who also owns a rental property. This year, she collected...
Lyn, a single, self-employed investment counselor who also owns a rental property. This year, she collected $85,000 in fees and paid the following business and personal expenses Expenses below: Health insurance premiums (not through an exchange) $ 4,200 Life insurance premiums (whole life) $ 1,900 Books on investing $ 200 Repairs of the rental property $ 450 Advertising for investment clients $ 1,770 State income taxes $ 4,300 Self-employment tax (hint: half is employer share) $ 11,732 Marketing Lunch and...
Deductions from Adjusted Gross Income, Calculating Tax Liability (LO. 3, 5) Hongtao is single and has...
Deductions from Adjusted Gross Income, Calculating Tax Liability (LO. 3, 5) Hongtao is single and has a gross income of $90,100. His allowable deductions for adjusted gross income are $4,300, and his itemized deductions are $13,400. The standard deduction for 2017 is $6,350 and a personal exemption is $4,050. Round all amounts to the nearest dollar. Refer Tax Rate Schedules to answer the following questions. a. Hangtao's taxable income is $ and his tax liability is $________ for 2017. b....
Income statement preparation   On December​ 31, 20192019​, Cathy​ Chen, a​ self-employed certified public accountant​ (CPA), completed...
Income statement preparation   On December​ 31, 20192019​, Cathy​ Chen, a​ self-employed certified public accountant​ (CPA), completed her first full year in business. During the​ year, she charged her clients $ 366 comma 000$366,000 for her accounting services. She had two​ employees, a bookkeeper and a clerical assistant. In addition to her monthly salary of $ 8 comma 050$8,050​, Ms. Chen paid annual salaries of $ 48 comma 500$48,500 and $ 35 comma 800$35,800 to the bookkeeper and the clerical​ assistant,...
During the year, the Senbet Discount Tire Company had gross sales of $1.11 million. The company’s...
During the year, the Senbet Discount Tire Company had gross sales of $1.11 million. The company’s cost of goods sold and selling expenses were $580,000 and $233,000, respectively. The company also had notes payable of $720,000. These notes carried an interest rate of 4 percent. Depreciation was $110,000. The tax rate was 25 percent. a. What was the company’s net income? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, rounded to the nearest whole...
During the year, the Senbet Discount Tire Company had gross sales of $1.24 million. The company’s...
During the year, the Senbet Discount Tire Company had gross sales of $1.24 million. The company’s cost of goods sold and selling expenses were $593,000 and $246,000, respectively. The company also had notes payable of $850,000. These notes carried an interest rate of 5 percent. Depreciation was $123,000. The tax rate was 23 percent. a. What was the company’s net income? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars, rounded to the nearest whole...
Your client, Mr. X began a self-employed, unincorporated coffee business 123 Ltd. Mr. X would like...
Your client, Mr. X began a self-employed, unincorporated coffee business 123 Ltd. Mr. X would like some assistance in preparing his 2020 tax return. You have been provided with the following information: 123 Ltd. Statement of Income For the year ended December 31, 2020 Revenue $                78,000 Less: cost of goods sold $                 25,450 Gross profit $               103,450 Expenses: Travel - meals $                    1,750 Travel - accommodation $                   4,400 Trave - total operating expenses - car (note a) $                   4,500...
Robert Lento, the sole proprietor of a consulting business, has gross receipts of $600,000 in 2019....
Robert Lento, the sole proprietor of a consulting business, has gross receipts of $600,000 in 2019. Expenses paid by his business are Advertising $ 2,500 Employee salaries 150,000 Office rent 24,000 Supplies 18,000 Taxes and licenses 17,000 Travel (other than meals) 3,800 Business Meals 2,400 Utilities 3,800 Employee health insurance premiums 6,600 Health insurance premiums for Robert 2,200 Robert purchased a new car for his business on May 15 for $50,000. He also purchased $50,000 of new 5-year equipment and...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT