Question

In 2019, Miranda records net earnings from self-employment of $165, 100. She has no other income. Determine the amount of Miranda's self-employment tax and her for AGI income tax deduction. In your computations round all amounts to two decimal places. Round your final answers to the nearest dollar. Miranda's self-employment tax is 20,558 X and she has a $ 10,279 X deduction for AGI

Answer 1

Net Earnings from Self-Employment	$ 165,100.00
Multiply by ( 1- 7.65%) = 92.35%	X 92.35%
	$ 152,469.85
Excess amount over $132,900	$   19,569.85
Multiply excess by 2.9% (Medicare)	x 2.9%
	$        567.53
Total self employment tax = (132,900 x 15.3%) + $567.53)	$   20,901.23
The taxpayer is allowed a deduction for AGI of one-half of the self-employment tax, which equals  ($20,901.23 x 50%)	$   10,450.61