A self-employed individual has earnings from his business of $300,000.For the earnings in excess of the $118,500,he will only have to pay the 2.9% Medicare tax.

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The Medicare tax has two parts: the 1.45% tax which applies to all earnings and the additional 0.9% tax which applies only to earnings over a certain threshold ($200,000 for individuals or $250,000 for married couples filing jointly). Therefore, the self-employed individual would have to pay both the 1.45% and the 0.9% Medicare tax on earnings over $200,000, not just the 2.9% tax.

A Self-Employed Individual Has Earnings from His Business of $300,000