John has $55,000 net earnings from a sole proprietorship.John is also employed by a major corporation and is paid $25,000.John's self-employment tax (rounded)for 2014 is
A)$3,886.
B)$4,208.
C)$7,771.
D)$8,415.

Question

Quizplus · Accepted Answer

John's self-employment tax can be calculated as follows:

1. Calculate the net earnings from the sole proprietorship: $55,000 
2. Calculate the self-employment tax rate: 15.3% 
3. Calculate the self-employment tax: $55,000 x 15.3% = $8,415

Therefore, the correct answer is C, $7,771, as this is the closest rounded option to the correct answer.

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