Sam has $80,000 of net income from his sole proprietorship in 2019.What is his deduction for AGI for self-employment taxes?
A)$9,826
B)$6,120
C)$5,652
D)$4,913

Question

Quizplus · Accepted Answer

The self-employment tax rate is 15.3%, and only 92.35% of net income is subject to this tax. Therefore, the deduction for AGI is half of the self-employment tax: 0.153 * 0.9235 * $80,000 / 2 = $5,652.

Sam Has $80,000 of Net Income from His Sole Proprietorship