Cailey and Dimitri Are Married and File a Joint Tax

question 112

Multiple Choice

Cailey and Dimitri are married and file a joint tax return. Cailey has $170,000 in salary and Dimitri has $210,000 in self-employment income in 2018. How much must they pay on their individual tax return for their Medicare surtax?

• A) $0
• B) $1,025
• C) $1,170
• D) $3,420

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Definitions:

Consolidation Process

The consolidation process involves combining the financial statements of a parent company and its subsidiaries into one set of financial statements, presenting it as if the group of companies is a single entity.

Partial Equity Method

An accounting method where an investment is recorded at cost and adjusted for post-acquisition changes in the investor’s proportion of the investee's net assets.

Outstanding Shares

Outstanding shares refer to the total number of shares of a corporation's stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares.

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements that helps in combining the financial information of a parent company and its subsidiaries.