John has $55,000 net earnings from a sole proprietorship.John is also employed part-time by a major corporation and is paid $25,000.John's self-employment tax (rounded)for 2015 is
A)$3,886.
B)$4,208.
C)$7,771.
D)$8,415.

Question

Quizplus · Accepted Answer

To calculate John's self-employment tax for 2015, we need to first calculate his net earnings from self-employment.

Net earnings from self-employment = $55,000

Next, we need to calculate the self-employment tax. Self-employment tax is calculated as follows:

Self-employment tax = (Net earnings from self-employment) x (15.3%)

= $55,000 x 0.153

= $8,415

Therefore, John's self-employment tax for 2015 is $7,771 (rounded to the nearest dollar).

Choice C is the correct answer.

John Has $55,000 Net Earnings from a Sole Proprietorship