51 john has 55 000 net earnings from a sole proprietorship john is also employed by 4313260

51 john has 55 000 net earnings from a sole proprietorship john is also employed by 4313260

51) John has $55,000 net earnings from a sole proprietorship. John is also employed by a major corporation and is paid $25,000. John's self-employment tax (rounded) for 2013 is

A) $3,886.

B) $4,208.

C) $7,771.

D) $8,415.

52) Joe has $130,000 net earnings from a sole proprietorship. Joe's self-employment tax (rounded) for 2013 is

A) $17,581.

B) $18,368.

C) $19,890.

D) None of the above.

53) Hong earns $127,300 in her job as a physician's assistant. She also has her own business selling cosmetics. This business generated $10,000 of earnings. What is Hong's self-employment tax for 2013?

A) $268

B) $290

C) $1,412

D) $1,530

54) Ava has net earnings from self-employment of $125,000.  She also earned salary of $170,000 from a job held earlier in the year.  How much Additional Medicare Tax will be owed on the self-employment income?

A) $0

B) $855

C) $1,125

D) $3,625

55) All of the following statements regarding self-employment income/tax are true except:

A) The self-employment tax is imposed on net earnings from self-employment over $400.

B) Self-employment tax is computed separately for married individuals filing joint returns.

C) Independent contractors are subject to self-employment tax on the amount of net earnings from the self-employment activity.

D) Employees who have a business in addition to their regular employment are not subject to the self-employment tax since FICA is withheld on their wages.

56) All of the following are self-employment income except

A) net income of a sole proprietorship.

B) dividends received by a corporate shareholder.

C) fees received for serving as a director of a corporation.

D) distributive share of partnership income from a partnership operating a business.

57) Nonrefundable tax credits

A) only offset a taxpayer's tax liability.

B) may only be used if the taxpayer is receiving a refund.

C) can be carried back two years and carried forward 15 years if they exceed tax liability in the current year.

D) allow the excess over the taxpayer's tax liability to be paid to the taxpayer.

58) Refundable tax credits

A) only offset a taxpayer's tax liability.

B) may only be used if the taxpayer is receiving a refund.

C) have all expired but may be reinstated with new tax legislation.

D) allow the excess over the taxpayer's tax liability to be paid to the taxpayer.

59) Which statement is correct?

A) Tax credits reduce tax liability on a dollar-for-dollar basis.

B) Tax deductions reduce tax liability on a dollar-for-dollar basis.

C) The benefit of a tax credit depends on the taxpayer's marginal tax rate.

D) Tax deductions are less valuable for high-income taxpayers than for low-income taxpayers.

60) Max and Alexandra are married and incur $5,500 of qualifying expenses to care for their two children, ages 2 and 5. Max's earned income is $35,000 and Alexandra's earnings from a part-time job are $5,000. What is the amount of the qualifying expenses for purposes of computing the child and dependent care credit?

A) $3,000

B) $5,000

C) $5,500

D) $6,000

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