Shanita is a self-employed event planner. She has net earnings (profit) from her business of $63,220. Her self-employment taxes for the year are: (Round your answer two decimal places)

Question

Quizplus · Accepted Answer

The self-employment taxes consist of both the employer and employee portions of Social Security and Medicare taxes. The total self-employment tax rate is 15.3% (12.4% for Social Security and 2.9% for Medicare). 
To calculate the self-employment tax, Shanita needs to multiply the net earnings by 92.35% (which is the percentage after deducting the employer portion of Social Security tax that is not applicable to self-employed individuals) and then multiply the result by 15.3%. 
Thus, the self-employment tax for Shanita is calculated as follows:
$63,220 x 0.9235 x 0.153 = $8,932.70, rounded to two decimal places.
Therefore, the best choice is B, which is $8,932.70.

Shanita Is a Self-Employed Event Planner