Self-Employment Tax

Question 1

Major Categories of Income giving Rise to Self-Employment Tax

Answer 1

(1) Self-employment income, (2) Schedule C net income, (3) Distributive share of Partnership net income, (4) Schedule F farm income, (5) and net income from rental or personalty (bot not realty.) (6) Flow through of S-corp income is not subject to self-employment tax

Question 2

Basic Self-Employment Tax Calculation

Answer 2

(1) Self-employment income, (2) Less 7.65 (3) plus 15.3%; (4) S-corp income is not subject to self-employment tax

Question 3

Net Earnings Exceeding $117,000 wage base

Answer 3

(1) Less 7.65; (2)15.3% on $117k + (3) 2.9% on excess above 2.9%

Question 4

Net Earnings Exceeding $200k for Single, $250k for Married

Answer 4

(1) Less 7.65%, (2) Less 117k wage base, (3) 2.9% on excess; (4) 15.3%*117k, (5) .9% above $200k

Question 5

Deduction for Self-Employment Tax

Answer 5

A taxpayer is allowed to deduct one-half of his or her self-employment tax liability as an adjustment to income