During 2019, Zach Has Net Income from His Sole Proprietorship

question 41

Multiple Choice

During 2019, Zach has net income from his sole proprietorship of $35,000.He also earned $106,600 as an employee in 2019.How much self-employment tax must Zach pay?

• A)$5,355
• B)$4,905
• C)$4,945
• D)$4,199
• \(\begin{array}{|l|r|r|}
• \hline \text { Social Security and Medicare Taxes } & \mathbf{2 0 1 9} & \mathbf{2 0 1 8} \\
• \hline \text { FICA Social Security tax rate } & 6.2 \% & 6.2 \% \\
• \hline \text { SECA Social Security tax rate } & 12.4 \% & 12.4 \% \\
• \hline \text { FICA Medicare tax rate } & 1.45 \% & 1.45 \% \\
• \hline \text { SECA Medicare tax rate } & 2.9 \% & 2.9 \% \\
• \hline \text { Social Security income limit } & \$ 132,900 & \$ 128,400 \\
• \hline \text { Medicare tax income limit } & \mathrm{None} & \mathrm{None} \\
• \hline \text { Total SECA rate below SS income limit } & 15.3 \% & 15.3 \% \\
• \hline \text { Deductible SECA rate below SS income limit } & 7.65 \% & 7.65 \% \\
• \hline
• \end{array}\)

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Definitions:

Total Lead Times

The aggregate time taken from the initiation of a process until its completion, often used in manufacturing to describe the period from ordering materials to the final product delivery.

Value-Added Ratio

The proportion of time spent on non-waste activities in the production process.

Appraisal Cost

A quality control cost incurred to identify defective products before they are shipped to customers, including costs of inspections and testing.

Non-Value-Added

Activities or processes that increase the cost of a product without enhancing its value to the customer.