Problema Solution
Juanita is the self-employed owner of Juanita's Linens. Her estimated annual earnings are $73,040 and she expects to pay 27% of this amount in income tax. What will be her quarterly estimated tax payment for the third quarter? (For self-employed persons, social security tax is 12.4% of wages up to $106,800, and Medicare tax is 2.9% of all wages.)
Answer provided by our tutors
27% of $73,040 is:
.27(73,040)=$19720.8
Divided into quarterly payments, this will be:
1/4(19720.8)=$4930.2
If we take into account Self-Employment Tax (Social Security and Medicare Taxes) only we have
73040(0.124 + 0.029) = $11175.12
Divided into quarterly payments, this will be:
1/4(11175.12)=$2793.78