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Joanne Plummer is self-employed in 2019. Her Schedule C net income is $36,600 for the year, and Joanne also had a part-time job and earned $4,400 that was subject to FICA tax. Joanne received taxable dividends of $1,110 during the year, and she had a capital gain on the sale of stock of $9,100. Calculate Joanne's self-employment tax using page 1 of Schedule SE of Form 1040.

Joanne Plummer is self-employed in 2019. Her Schedule C net income is $36,600 for the year, and Joanne also had a part-time job and earned $4,400 that was subject to FICA tax. Joanne received taxable dividends of $1,110 during the year, and she had a capital gain on the sale of stock of $9,100. Calculate Joanne's self-employment tax using page 1 of Schedule SE of Form 1040.

FINANCIAL ACCOUNTING
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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Joanne Plummer is self-employed in 2019. Her Schedule C net income is $36,600 for the year, and Joanne also had a part-time job and earned $4,400 that was subject to FICA tax. Joanne received taxable dividends of $1,110 during the year, and she had a capital gain on the sale of stock of $9,100.

Calculate Joanne's self-employment tax using page 1 of Schedule SE of Form 1040.

OMB No. 1545-0074 SCHEDULE SE Self-Employment Tax (Form 1040 or 1040-SR) 2019 • Go to www.irs.gov/ScheduleSE for instructions and the latest information. Attachment Department of the Treasury Internal Revenue Service (99) Attach to Form 1040, 1040-SR, or 1040-NR. Sequence No. 17 Name of person with self-employment income (as shown on Form 1040, Social security number of person 1040-SR, or 1040-NR) with self-employment income Joanne Plummer Before you begin: To determine if you must file Schedule SE, see the instructions. May I Use Short Schedule SE or Must I Use Long Schedule SE? Note: Use this flowchart only if you must file Schedule SE. If unsure, see Who Must File Schedule SE in the instructions. Did you receive wages or tips in 2019? No Yes Are you a minister, member of a religious order, or Was the total of your wages and tips subject to social Christian Science practitioner who received IRS Yes security or railroad retirement (tier 1) tax plus your Yes approval not to be taxed on earnings from these net earnings from self-employment more than sources, but you owe self-employment tax on other $132,900? earnings?
Transcribed Image Text:OMB No. 1545-0074 SCHEDULE SE Self-Employment Tax (Form 1040 or 1040-SR) 2019 • Go to www.irs.gov/ScheduleSE for instructions and the latest information. Attachment Department of the Treasury Internal Revenue Service (99) Attach to Form 1040, 1040-SR, or 1040-NR. Sequence No. 17 Name of person with self-employment income (as shown on Form 1040, Social security number of person 1040-SR, or 1040-NR) with self-employment income Joanne Plummer Before you begin: To determine if you must file Schedule SE, see the instructions. May I Use Short Schedule SE or Must I Use Long Schedule SE? Note: Use this flowchart only if you must file Schedule SE. If unsure, see Who Must File Schedule SE in the instructions. Did you receive wages or tips in 2019? No Yes Are you a minister, member of a religious order, or Was the total of your wages and tips subject to social Christian Science practitioner who received IRS Yes security or railroad retirement (tier 1) tax plus your Yes approval not to be taxed on earnings from these net earnings from self-employment more than sources, but you owe self-employment tax on other $132,900? earnings?
Section A-Short Schedule SE. Caution: Read above to see if you can use Short Schedule SE. la Net farm profit or (loss) from Schedule F, line 34, and farm partnerships, Schedule K-1 (Form 1065), box 14, code A..... 1a b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve Program payments included on Schedule F, line 4b, or listed on Schedule K-1 (Form 1065), box 20, code 1b ( АН .... 2 Net profit or (loss) from Schedule C, line 31; and Schedule K-1 (Form 1065), box 14, code A (other than farming). Ministers and members of religious orders, see instructions for types of income to report on this line. See instructions for other income to report. 2. 3 Combine lines la, 1b, and 2... 4 Multiply line 3 by 92.35% (0.9235). If less than $400, you don't owe self-employment tax; don't file this schedule unless you have an amount on line 1b 4 Note: If line 4 is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. 5 Self-employment tax. If the amount on line 4 is: • $132,900 or less, multiply line 4 by 15.3% (0.153). Enter the result here and on Schedule 2 (Form 1040 or 1040-SR), line 4, or Form 1040-NR, line 55 • More than $132,900, multiply line 4 by 2.9% (0.029). Then, add $16,479.60 to the result. Enter the total here and on Schedule 2 (Form 1040 or 1040-SR), line 4, or Form 1040-NR, line 55 5 6 Deduction for one-half of self-employment tax. Multiply line 5 by 50% (0.50). Enter the result here and on Schedule 1 (Form 1040 or 1040-SR), line 14, or Form 1040-NR, line 27.... 6
Transcribed Image Text:Section A-Short Schedule SE. Caution: Read above to see if you can use Short Schedule SE. la Net farm profit or (loss) from Schedule F, line 34, and farm partnerships, Schedule K-1 (Form 1065), box 14, code A..... 1a b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve Program payments included on Schedule F, line 4b, or listed on Schedule K-1 (Form 1065), box 20, code 1b ( АН .... 2 Net profit or (loss) from Schedule C, line 31; and Schedule K-1 (Form 1065), box 14, code A (other than farming). Ministers and members of religious orders, see instructions for types of income to report on this line. See instructions for other income to report. 2. 3 Combine lines la, 1b, and 2... 4 Multiply line 3 by 92.35% (0.9235). If less than $400, you don't owe self-employment tax; don't file this schedule unless you have an amount on line 1b 4 Note: If line 4 is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. 5 Self-employment tax. If the amount on line 4 is: • $132,900 or less, multiply line 4 by 15.3% (0.153). Enter the result here and on Schedule 2 (Form 1040 or 1040-SR), line 4, or Form 1040-NR, line 55 • More than $132,900, multiply line 4 by 2.9% (0.029). Then, add $16,479.60 to the result. Enter the total here and on Schedule 2 (Form 1040 or 1040-SR), line 4, or Form 1040-NR, line 55 5 6 Deduction for one-half of self-employment tax. Multiply line 5 by 50% (0.50). Enter the result here and on Schedule 1 (Form 1040 or 1040-SR), line 14, or Form 1040-NR, line 27.... 6
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