Byron,54,is a Single,self-Employed,carpenter

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The Answer is The first step is to determine Byron's self-employment income and self-employment tax.He is entitled to a deduction for adjusted gross income for one-half of his self-employment tax.Only 92.35% of Byron's income is subject to self-employment tax.His self-employment income is $54,000 ($60,000 - $6,000).Thus,Byron's self-employment tax is $7,630[($54,000 × 92.35%)× 15.3%] and his deduction for adjusted gross income is $3,815 ($7,630 × 50%).Byron's adjusted gross income is $50,185 ($60,000 - $6,000 - $3,815).After deducting his itemized deductions of $8,000 and his personal exemption of $4,050,Byron's taxable income is $38,135.Byron's income tax liability is $5,273{$5,226.25 + [($38,135 - $37,950)× .25]}.Byron's total tax liability is $12,903 ($5,273 income tax + $7,630 self-employment tax).

The first step is to determine Byron's self-employment income and self-employment tax.He is entitled to a deduction for adjusted gross income for one-half of his self-employment tax.Only 92.35% of Byron's income is subject to self-employment tax.His self-employment income is $54,000 ($60,000 - $6,000).Thus,Byron's self-employment tax is $7,630[($54,000 × 92.35%)× 15.3%] and his deduction for adjusted gross income is $3,815 ($7,630 × 50%).Byron's adjusted gross income is $50,185 ($60,000 - $6,000 - $3,815).After deducting his itemized deductions of $8,000 and his personal exemption of $4,050,Byron's taxable income is $38,135.Byron's income tax liability is $5,273{$5,226.25 + [($38,135 - $37,950)× .25]}.Byron's total tax liability is $12,903 ($5,273 income tax + $7,630 self-employment tax).

Byron,54,is a Single,self-Employed,carpenter

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