106800 minus income subject to social security taxes The hospital insurance

106800 minus income subject to social security taxes

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$106,800 minus income subject to social security taxes. The hospital insurance self-employment tax is imposed on self-employment income (in Andy’s case, $20,000 × .9235, or $18,470).
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419 Testbank © 2010 CCH. All Rights Reserved. Chapter 3 Maximum subject to OASDI self-employment tax $106,800.00 Less: Income subject to social security 97,200.00 Amount subject to OASDI self-employment tax $9,600.00 OASDI self-employment tax rate × 12.4% OASDI self-employment tax $1,190.40 HI net earnings from self-employment $18,470.00 HI self-employment tax rate × 2.9% HI self-employment tax $535.63 OASDI self-employment tax $1,190.40 HI self-employment tax 535.63 Total self-employment tax $1,726.03 b. Self-employment taxable income must be at least $400 before the self- employment tax is imposed. 48. e. None of the listed items are subject to the self-employment tax. 49. a. Deductions from AGI are primarily nonbusiness deductions. 50.
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420 CCH Federal Taxation—Basic Principles Chapter 3 © 2010 CCH. All Rights Reserved. ANSWERS TO SUPPLEMENTARY PROBLEMS—CHAPTER 3 Junior’s taxable income is $0, $2,000 of gross income minus the standard deduction of $2,000. 51. Mrs. Acres will not be able to claim any personal exemptions for her deceased husband in the year 52. following death. She will be eligible to claim one personal exemption as a taxpayer. The requirements for head of household status are: 53. (a.) Maintain a household (b.) Have a dependent (c.) Dependent must be a relative (d.) Dependent must live with taxpayer The exceptions are that your own child does not have to be a dependent and your parents do not have to live with you. Surviving spouse status may be claimed for the two years following the year of death. 54. Interest income does not enter into the self-employment tax computation. 55. Maximum subject to OASDI self-employment tax $106,800.00 Less: Amount subject to social security tax 90,100.00 Amount subject to OASDI self-employment tax $16,700.00 OASDI self-employment tax rate × 12.4% OASDI self-employment tax $2,070.80 HI self-employment tax ($20,000 × .9235 × 2.9%) 535.63 Total self-employment tax $2,606.43
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421 Testbank © 2010 CCH. All Rights Reserved. Chapter 3 True-False Question Ratings Easy 1. Easy 2. Easy 3. Easy 4. Easy 5. Easy 6. Easy 7. Easy 8. Easy 9. Easy 10. Easy 11. Easy 12. Easy 13. Easy 14. Easy 15. Easy 16. Moderate 17. Moderate 18. Easy 19. Easy 20. Easy 21. Easy 22. Easy 23. Easy 24. Easy 25. Easy 26. Easy 27. Easy 28. Easy 29. Easy 30. Moderate 31. Multiple Choice Question Ratings Easy 32. Easy 33. Easy 34. Easy 35. Moderate 36. Moderate 37. Easy 38. Easy 39. Easy 40. Easy 41. Easy 42. Easy 43. Easy 44. Easy 45. Easy 46. Dif fi cult 47. Easy 48. Easy 49. Moderate 50. Supplementary Problem Ratings Easy 51. Easy 52. Moderate 53. Easy 54. Dif fi cult 55. DIFFICULTY LEVEL RATINGS—CHAPTER 3 The following table denotes the relative dif fi culty level of each question. Teachers may wish to organize test questions based on the dif fi culty level of the particular class.
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