Answered: In 2020, Shelly had net earnings from…

In 2020, Shelly had net earnings from her business of $160,000. What is the amount of Shelly’s self-employed tax? Round answer to nearest dollar.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter9: Deduct Ions: Employee And Self-employed - Related Expenses

Section: Chapter Questions

Problem 38P

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Concept explainers

Tax Deferred Retirement Benefits

It stands for Simplified Employee Pension Individual Retirement Account. This savings plan is for self-employed persons such as independent contractors, freelancers, entrepreneurs, etc. The tax rules of SEP IRA are the same as traditional IRA. Entrepreneurs can also open SEP IRA accounts for their employees and gain a tax advantage. The employees cannot make contributions to these accounts by themselves however they will be taxed upon withdrawal.

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In 2020, Shelly had net earnings from her business of $160,000. What is the amount of Shelly’s self-employed tax? Round answer to nearest dollar.

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