Lexa,a Single Taxpayer,worked as an Employee During the First Half

question 138

Essay

Lexa,a single taxpayer,worked as an employee during the first half of the year earning $65,000 of salary.Lexa's employer withheld $4,030 of Social Security tax,$943 of Medicare tax,and $0 of .9 percent additional Medicare tax.In the second half of the year,she was self-employed and she reported $180,000 of self-employment income on her Schedule C.What amount of self-employment taxes and.9 percent additional Medicare tax is Lexa required to pay on her self-employment income?

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Definitions:

Internal Revenue Service

The U.S. government agency responsible for tax collection and tax law enforcement.

Enabling Legislation

A statute enacted by Congress that authorizes the creation of an administrative agency and specifies the name, composition, purpose, and powers of the agency.

Administrative Agencies

Governmental bodies having jurisdiction to implement and enforce specific legislation.

Executive Branch

The branch of government responsible for implementing and enforcing laws, typically headed by the president or prime minister.