Answered

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Randall owns and operates a successful landscaping company. His net profit income in 2019 was $209,000. What is the amount of SE tax he must pay

Sagot :

anthougo

Answer:

Randall

The amount of SE tax he must pay is:

$22,540.60

Explanation:

a) Data and Calculations:

Net profit income for 2019 = $209,000

Self-employment tax:

First $132,900 * 15.3% = $20,333.70

Excess of $76,100 ($209 - 132,900) * 2.9% = $2,206.90

Total SE tax = $22,540.60

b) The IRS states that Randall's self-employment (SE) tax 2019 rate is 15.3 percent on the first $132,900 of his net profit income plus 2.9 percent on the net income in excess of $76,100 ($209 - 132,900).  It has been ascertained that being self-employed can significantly lower the tax bill. The self-employed can claim specific benefits, allowances, and reliefs if they are business expenses. These business expenses may include various office costs, advertising and marketing, and travel costs.

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