Lara Started a Self-Employed Consulting Business in the Last Part

question 33

Essay

Lara started a self-employed consulting business in the last part of the year and earned $60,000 of self- employment income.She had been employed as manager in a consulting firm prior to starting her own business and had earned $175,000.
(a)What is Lara's Additional Medicare Tax for 2014,if any?
(b)What is Lara's deduction for AGI for the Additional Medicare Tax?

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Definitions:

Price Falls

A decrease in the cost of goods or services in the market.

Surplus Decrease

A reduction in the amount by which the quantity supplied of a product exceeds the quantity demanded.

Consumer Surplus

The gap between the amount consumers are prepared to pay for a product or service and the actual price they pay.

Surplus Increase

Refers to the rise in excess resources or goods available beyond what is needed or consumed.