Calculate Otto’s self-employment tax Calculate the employer’s portion of the nanny tax that they should pay Calculate the nanny’s portion of the tax.
Calculate Otto’s self-employment tax Calculate the employer’s portion of the nanny tax that they should pay Calculate the nanny’s portion of the tax.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter10: Individuals: Income, Deductions, And Credits
Section: Chapter Questions
Problem 30P
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Question
Julie and Otto are married and file a joint return. They have a young child who needs care while they work. Otto is a self-employed architect but also does some part time work as an Uber driver. From his self-employment he receives $150,000 and from his Uber driving he receives $10,000. They hire a nanny, aged 19 years to watch their child and pay her $190 per week for 40 weeks during the current year (2020).
Required:
- Calculate Otto’s self-employment tax
- Calculate the employer’s portion of the nanny tax that they should pay
- Calculate the nanny’s portion of the tax.
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