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 2015. How much of his total earnings are subject to self-employment tax for 2015?

Question

Quizplus · Accepted Answer

The self-employment tax rate for 2015 is 15.3% (12.4% for Social Security and 2.9% for Medicare) on net earnings up to $118,500. 
Daniel's net earnings subject to self-employment tax are the $28,000 from his consulting business. 
Therefore, the self-employment tax for Daniel is: 
$28,000 x 0.153 = $4,284.00 for Social Security and Medicare.
This amount is in addition to the Medicare and Social Security taxes that are already being withheld from his regular job earnings. 
Therefore, the total amount of Daniel's earnings subject to self-employment tax for 2015 is: 
$4,284.00. 
Thus, the correct answer is C ($4,284.00).

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