Martha is self-employed in 2014.Her business profits are $140,000.What is her self-employment tax?
A)$21,420
B)$18,568
C)$18,159
D)None of the above.

Question

Quizplus · Accepted Answer

The self-employment tax rate in 2014 is 15.3%. The Social Security portion is 12.4% on the first $117,000, and the Medicare portion is 2.9% on the entire amount. Therefore, the tax is (12.4% of $117,000) + (2.9% of $140,000) = $18,568.

Martha Is Self-Employed in 2014