Tanya has earnings from self-employment of $240,000,resulting in self-employment tax of $22,908 and Additional Medicare Tax of $360.Due to these taxes,Tanya will be allowed a deduction for AGI of
A)$11,634.
B)$23,268.
C)$11,454.
D)$22,908.

Question

Quizplus · Accepted Answer

The deduction for AGI for self-employment tax is calculated as follows: 
Self-employment tax = $22,908 
Additional Medicare Tax = $360 
Total deduction = $22,908 + $360 = $23,268 
However, the deduction for AGI is only half of the self-employment tax, which is $11,454. Therefore, the correct answer is choice C.

Tanya Has Earnings from Self-Employment of $240,000,resulting in Self-Employment Tax