Question

C Solved: Social Secur.. 0 Pearson's Federal T... Sign in to your acco.. NOTE: Use the following information to answer Questions 13-15. 13. Mr. and Mrs. Lawson have the following tax information for 2018 and file a joint return. Salary-Mr. Lawson Salary-Mrs. Lawson $ 90,000 60,000 Gross receipts from Mr. Lawson's consulting business 210,000 Expenses related to Mr. Lawson's consulting business 140,000 Interest received from municipal bonds 12,000 Itemized deductions What is Mr. Lawson's self-employment tax (rounded)? a. $ 5,875 b. $ 6,636 c. $10.710 d. $ 9,891 e. None of the above 14. ASSUME that self-employment tax is $10,000. What is AGI? a. $215,000 b. $227,000 c. $222,000 d. $220,000 e. None of the above 15. ASSUME that taxable income is $215,000. What is the regular income tax liability? a $ 51,600 b. $ 75,250 c. $ 50,940 d. $ 40,179 e. None of the above

Answer 1

Ans:

13. The correct answer is (d) $9891

Explanation:

Gross Income from Mr. Lawsons consulting business	$210000
Less: Expenses relating to Mr. Lawsons consulting business	($140000)
Net Income from Business	$70000
Incom subject to self employmnt tax (92.35% of Net income)	$64645
Self employment tax $70000 * 15.3% (15.3% upto $137700)	$9891

14. The correct answer is (d) $220000

Explanation:

Salary Mr. Lawson		$90000
Salary Mrs. Lawson		$60000
Gross Income from Mr. Lawsons consulting business	$210000
Less: Expenses relating to Mr. Lawsons consulting business	($140000)	$70000
Interest received from municipal bonds (Tax free)		$0
Less: Itemzed deduction		$0
Adjusted Gross Income		$220000

15. The correct answer is (d) $40179

Explanation:

Tax rates in 2018

Taxable income is between	Tax Rate	Calculation	Tax liability
$0-$19050	10% of taxable Income	$1905	$1905
$19051-$77400	$1905 + 12% of the amount over $19050	$1905 +($77400-$19050)*12%	$8907
$77401-$165000	$8907 + 22%of the amount over $77400	$8907 + ($165000-$77400)	$28179
$165001-$315000	$28179 + 24% of the amount over $165000	$28179 + (24% of $50000) =	$40179