A self-employed individual has earnings from his business of $300,000. For the earnings in excess of the $117,000,he will only have to pay the 2.9% Medicare tax.

Question

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The earnings in excess of $200,000 for a self-employed individual are subject to an additional 0.9% Medicare tax, bringing the total Medicare tax rate to 3.8%. Therefore, for the earnings in excess of $200,000, the self-employed individual will have to pay both the 2.9% Medicare tax and the additional 0.9% Medicare tax.

A Self-Employed Individual Has Earnings from His Business of $300,000