Pat generated self-employment income in 2016 of $76,000.The self-employment tax is:

Question

Quizplus · Accepted Answer

The self-employment tax is calculated as 15.3% of the net self-employment income for the year. In 2016, the maximum amount of net self-employment income subject to this tax is $118,500. Therefore, Pat's self-employment tax would be $76,000 x 15.3% = $11,628. However, only the first $10,738.46 of self-employment tax is deductible on the individual's income tax return. Therefore, the correct answer is C, $10,738.46.

Pat Generated Self-Employment Income in 2016 of $76,000