Jane is a self-employed attorney. This year, her net profit exceeded $350,000, which put her in the 37 percent tax bracket. Early in the year, Jane hired Ben as a paralegal and paid him a $33,000 salary. a. Compute the employer payroll tax on Ben's salary. b. In addition to the employer payroll tax, Jane paid $400 unemployment tax on Ben's salary. The salary and tax expense reduced Jane's net earnings from self employment, thereby saving $962 in self-employment tax. Compute Jane's after-tax cost of hiring Ben.

Jane is a self-employed attorney. This year, her net profit exceeded $350,000, which put her in the 37 percent tax bracket. Early in the year, Jane hired Ben as a paralegal and paid him a $33,000 salary. a. Compute the employer payroll tax on Ben's salary. b. In addition to the employer payroll tax, Jane paid $400 unemployment tax on Ben's salary. The salary and tax expense reduced Jane's net earnings from self employment, thereby saving $962 in self-employment tax. Compute Jane's after-tax cost of hiring Ben.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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