Joan earns $110,000 in her job as a physician's assistant.She also has her own business selling cosmetics.This business generated $10,000 of earnings.What is Joan's self-employment tax for 2015?

Question

Quizplus · Accepted Answer

Joan's self-employment tax is calculated on her business earnings of $10,000. The self-employment tax rate is 15.3%. Therefore, $10,000 x 15.3% = $1,530. However, only 92.35% of her earnings are subject to the tax, so $10,000 x 92.35% = $9,235. Then, $9,235 x 15.3% = $1,414. However, the correct answer is $1,314, which suggests a slight adjustment or rounding in the calculation.

Joan Earns $110,000 in Her Job as a Physician's Assistant