Daniel is a computer technical support representative earning $95,000 per year and also has a sole proprietor consulting business where he earned $28,000 for 2017.How much of his total earnings are subject to self-employment tax for 2017?

Question

Quizplus · Accepted Answer

Only the income earned through the sole proprietor consulting business is subject to self-employment tax. Therefore, Daniel's total earnings subject to self-employment tax for 2017 is $28,000.

To calculate the exact self-employment tax amount, we need to use the 2017 self-employment tax rate of 15.3%.

Self-employment tax = (self-employment income x 0.9235) x 0.153

= ($28,000 x 0.9235) x 0.153

= $25,858.

Therefore, the correct answer is option C.

Daniel Is a Computer Technical Support Representative Earning $95,000 Per