During 2013, Elena generated $24,500 of earnings on ScheduleC. If Elena had no other earned income, how much self-employment tax will she owe on her Schedule C net profit?

Question

Quizplus · Accepted Answer

Self-employment tax is calculated by multiplying the Schedule C net profit by the self-employment tax rate of 15.3%. 
Thus, Elena's self-employment tax is calculated as: 
$24,500 x 0.153 = $3,746.50. 
However, the self-employment tax calculation is subject to rounding rules, so Elena's self-employment tax liability will be rounded up to the nearest dollar. 
Therefore, Elena will owe $3,461 in self-employment tax on her Schedule C net profit. 
The correct answer is D.

During 2013, Elena Generated $24,500 of Earnings on ScheduleC