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25 October, 13:24

Annie is self-employed and has $58,000 in income from her business. She also has investments that generated dividends of $3,000 and interest of $2,500. What is Annie's self-employment tax for the year?

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  1. 25 October, 13:35
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    First, you need to know the self-employment taxes:

    The self-employment tax is 92.35%

    Social security tax is 12.4% and Medicare tax is 2.9% = (15.3%)

    Dividends and interest are not a part of the income.

    58000 * 92.35% * 15.3%

    Turn the percentages into decimal form in order to multiply. You can do this by moving the decimals over twice or dividing each percentage by 100.

    58000*.9235 *.153 = $8,195.

    Annie's self-employment tax for the year is $8,195.
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