John has $55,000 of self- employment earnings from a sole proprietorship. John is also employed part- time by a major corporation and is paid $25,000. John's self- employment tax for 2018 is

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John's self-employment tax is calculated on his self-employment earnings of $55,000. The self-employment tax rate is 15.3%, which includes 12.4% for Social Security and 2.9% for Medicare. The Social Security portion is only applied to the first $128,400 of combined wages and self-employment income for 2018. Therefore, the self-employment tax is $55,000 * 15.3% = $8,415. However, only half of this amount is deductible, which is $4,207.50, but the question asks for the total self-employment tax, which is $8,415.

John Has $55,000 of Self- Employment Earnings from a Sole