Shante is employed by a local pharmaceutical company where she earned $48,000 in 2016.During the year,she also had self-employment income of $18,000.Her self-employment tax rounded to the nearest dollar is:

Question

Quizplus · Accepted Answer

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 $118,500 of combined wages and self-employment income for 2016. Shante's total income is $66,000 ($48,000 + $18,000), which is below the threshold. Therefore, her self-employment tax is 15.3% of $18,000, which is $2,754.

Shante Is Employed by a Local Pharmaceutical Company Where She