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20 April, 11:31

For 2019, Eric is a self-employed financial consultant. During the current year, Eric's net self-employment income is $132,150. The OASDI rate is 6.2%; the MHI rate is 1.45%. Hint: OASDI 6.2% tax is on the first $132,900 for the year. Note: Round all calculations to the nearest cent. What is Eric's self-employment tax?

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  1. 20 April, 13:34
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    The Eric's self-employment tax is $10109

    Explanation:

    The computation of the Eric's self employment tax is shown below:

    = Net Self employment income * OASDI tax rate + Net Self employment income * MHI tax rate

    = $132,150 * 6.2% + $132,150 * 1.45%

    = $8,193.30 + $1,916.175

    = $10109.475

    The OASDI tax rate is also called social security tax and the self employment tax comprises of OASDI tax and MHI tax.
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Home » Business » For 2019, Eric is a self-employed financial consultant. During the current year, Eric's net self-employment income is $132,150. The OASDI rate is 6.2%; the MHI rate is 1.45%. Hint: OASDI 6.2% tax is on the first $132,900 for the year.
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