Acompany buys a delivery vehicle today for R60 000 and assumes that the cost of replacing the vehicle increases by 12% p.a. and that the vehicle now owned depreciates at 20% p.a. The vehicle is expected to be replaced six years from now. In order to purchase a new vehicle six years from now, equal quarterly payments are made into a fund that earns 8% p.a., starting one quarter from now. If the vehicle now owned is sold in part payment for a new vehicle, the quarterly payments (to the nearest cent) made into the sinking fund are equal to R
Answers
The quarterly payments (to the nearest cent) made into the sinking fund are approximately R2,120.80.
To determine the quarterly payments made into the sinking fund, we can calculate the future value of the fund after six years, taking into account the 8% p.a. interest rate compounded quarterly.
First, let's calculate the future value of the vehicle's cost of replacement after six years, considering a 12% annual increase.
Cost of replacement in six years = \(R60,000 * (1 + 0.12)^6\)
Next, let's calculate the depreciation of the current vehicle after six years, considering a 20% annual depreciation rate.
Depreciated value of the current vehicle = \(R60,000 * (1 - 0.20)^6\)
The amount that needs to be accumulated in the sinking fund is the difference between the cost of replacement and the depreciated value of the current vehicle.
Amount needed in the sinking fund = Cost of replacement in six years - Depreciated value of the current vehicle
Now, we can calculate the quarterly payments required to accumulate the needed amount in the sinking fund. Using the formula for the future value of an ordinary annuity:
\(FV = PMT * ((1 + r)^n - 1) / r\)
Where:
FV = Future Value
PMT = Quarterly payment
r = Interest rate per period (8% per year / 4 quarters = 2% per quarter)
n = Number of periods (6 years * 4 quarters per year = 24 quarters)
PMT = \(Amount needed in the sinking fund / ((1 + r)^n - 1) * r\)
Let's plug in the values and calculate PMT:
PMT = \((Cost of replacement in six years - Depreciated value of the current vehicle) / ((1 + 0.02)^24 - 1) * 0.02\)
PMT ≈ R2,120.80
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Related Questions
PLEASE HELP ME
The law of demand states that:
A. demand for a product rises when its supply rises.
B. demand for a product falls when its price falls.
C. demand for a product rises when its price falls.
D. demand for a product rises when its supply falls.
Answers
Answer:
C
I hope it helps, sry if it doesn't!
I don't rly know how to explain it tho
Explanation:
describe the importance of section officer
Answers
Answer:
Section officer are important to give and take the services , cater the services effectively , distribute work among the staff as evenly as possible , drafts laws , put up notes , prepare summaries , manage the relevant record and data of concerned department, reply to letters , communicate with other departments , maintain order and discipline in the section maintenance, etc
In a paragraph response below, describe how the structure and organization of this text affected the listening/reading experience. How did it enhance the message behind the speech?
Answers
Text structure gives a text meaning since writers must arrange their work differently based on the type of information they're trying to convey. By comprehending and making use of the text structure while reading, readers can learn important facts and, as a result, the book's overall goal.
What is text structure?Text structures explain the organization of information in writers' texts. By comprehending the fundamental structure of texts, students may focus on key concepts and relationships, make predictions about what will occur next, and keep a record of their knowledge as they read.
A few examples of text structures are sequential, narrative, time, compare/contrast, proposition/support, problem/solution, order/chronology, cause/effect, inductive/deductive, and research.
The structure of academic writing must be sound. Academic writing requires a clear framework and logical flow in order to be coherent.
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Question 11 (Multiple Choice Worth 5 points) (03.05 MC) Christina received an offer for a grant to pay for her college tuition. If she accepts the grant, what does this mean? O She will have to pay back the money after graduation. O She will not have to pay back the money. O She will only have to pay back half of the money after graduation. She will have to pay back twice the amount of money after graduation.
Answers
Christina received an offer for a grant to pay for her college tuition. If she accepts the grant She will not be required to repay the money.
What is a payment from a grant?A payment called a grant is a type of financial aid that is given to a recipient by the government or another organization to help them pay for a project or program. Grants typically come in one lump sum, but they can also come in a series of smaller payments spread out over time.
Most of the time, grants are given out based on how well the applicant can show that their project or program is valuable to the public and will help the community in some way. Research grants, educational grants, community development grants, and business grants are all examples of grants. The recipient of a grant payment is not required to repay the grant money.
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what do you ask bree? can your customers resell your products to one another? what is your current profit? are your profits greater than your costs? what are your fixed costs?
Answers
If you were to ask Bree, the following are the potential questions:What is the status of the products of your customers?Can your customers resell your products to one another?
What is your current profit?Are your profits greater than your costs? What are your fixed costs?It is necessary to provide a little background to the questions and then add their answers for more clarity. Bree is most likely a seller who sells products to her customers, and therefore, these questions will be about her business.The first question, "What is the status of the products of your customers?" is an open-ended question that will allow Bree to explain if she knows whether her customers have received the products.
Moreover, she will clarify if there have been any issues with the product that the customers have received.Secondly, "Can your customers resell your products to one another?" is a question that will give Bree the opportunity to elaborate on her policy on reselling of products. It is an essential question because it will determine if there are any restrictions on reselling.
The third question, "What is your current profit?" is a direct question that will help Bree to explain how much she makes from her sales. It is an important question because it will help to establish the success of her business.
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The cytochrome complexes contain heme prosthetic groups, which have a higher redox potential than the iron-sulfur centers found in other electron-transport chain complexes like NADH dehydrogenase. Where in the electron-transport chain would the cytochrome complexes thus be located relative to iron-sulfur center complexes
Answers
In the electron transport chain, the cytochrome complexes are located at a higher energy level or further downstream compared to the iron-sulfur center complexes. This positioning is based on the concept of redox potential.
The electron transport chain is a series of protein complexes located in the inner mitochondrial membrane (in eukaryotes) or the plasma membrane (in prokaryotes). These complexes work together to transfer electrons from electron donors, such as NADH, to electron acceptors, such as oxygen, generating a proton gradient across the membrane and ultimately producing ATP. The iron-sulfur center complexes, such as those found in NADH dehydrogenase (Complex I) and succinate dehydrogenase (Complex II), are the initial electron carriers in the electron transport chain. These complexes contain iron-sulfur clusters, which have a relatively lower redox potential.
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A PLACE WHERE WEALTH IS DETERMINED BY YOUR DECISIONS AND NOT WHO YOUR
PARENTS ARE IS CALLED WHAT?
Answers
Answer:
maybe a cast system?
Explanation:
im probably wrong
how long after your federal taxes are accepted to get refund?
Answers
The Refunds are normally processed by the IRS for electronic files with direct transfer within 21 days. Refunds by paper check could take longer to arrive.
Why does IRS exist?The United States federal government's revenue service, the Internal Revenue Service (IRS), is in charge of collecting federal taxes and overseeing the Inland Revenue Code, the major body of federal statutory tax law.
What does the IRS actually do?The IRS's objective is to provide top-notch service to American taxpayers by assisting them in understanding and meeting their tax obligations and in the fair and impartial enforcement of the law.
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Brock Florist Company buys a new delivery truck for $36,000. It is classified as a light-duty truck. the tax rate is 0.3 a. Calculate the depreciation schedule using a five-year lfe and MACRS depreciation. b. Calculate the remaining book value at the end of year 4 and the termination value (aka. cost recovery or after tax salvage value) for the delivery truck if the truck can be sold at the end of year 4 for$2,000.
Answers
The depreciation schedule is determined using MACRS rates, while the remaining book value at the end of year 4 is $5,904.
How can we calculate the depreciation schedule and remaining book value for a delivery truck using MACRS depreciation?a) To calculate the depreciation schedule using MACRS (Modified Accelerated Cost Recovery System) for the delivery truck with a five-year life, we need to determine the depreciation rates for each year.
MACRS assigns different rates based on the asset class and recovery period. Assuming the truck falls under the 5-year property class, the depreciation rates for each year would be 20%, 32%, 19.2%, 11.52%, 11.52%.
b) To calculate the remaining book value at the end of year 4, we need to subtract the accumulated depreciation from the initial cost of the truck. If we assume equal depreciation each year, the accumulated depreciation at the end of year 4 would be 20% + 32% + 19.2% + 11.52% = 83.72% of the initial cost, which is $30,096.
The remaining book value at the end of year 4 would be $36,000 - $30,096 = $5,904.
The termination value or after-tax salvage value of the delivery truck at the end of year 4, if sold for $2,000, would be the difference between the sale price and the remaining book value, which is $2,000 - $5,904 = -$3,904.
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Elen holds 1,000 shares of fizbo inc. stock that she purchased 11 months ago. the stock has done very well and has appreciated $20/share since helen bought the stock. when sold, the stock will be taxed at capital gains rates (the long-term rate is 15 percent and the short-term rate is the taxpayer's marginal tax rate). ignore the time value of money.
Answers
Answer:
Question option include: a. if Helen's marginal tax rate is 35 percent, how much would she save by holding the stock an additional month before selling? b. what might prevent Helen from waiting to sell?
Solution
Per share increase in price = $20
No of shares = 1000
Total capital gain = 1000 * $20 = $20,000
Tax rate if hold for one year more = $20,000 * 15% = $3,000
If sold immediately and taxed as short term capital gain, then = $20,000 * 35% = $7,000
So if shares are held for more than a month a tax of {($7000 - $3000) = $4,000} can be saved.
b In a month shares prices may fall and capital appreciation would be reduced and this will increase the risk associated with the investment and she will not to wait for the liquidity for a month more.
Which of the following sections does not recapture or recharacterize a taxpayer's gain?
A. §1239.
B. §1244.
C. §1245.
D. §291.
E. None of these.
Answers
The following sections does not recapture or recharacterize a taxpayer's gain: None of these. The correct answer is E.
What is taxpayer's gain?
The term "taxpayer's gain" typically refers to a situation where a taxpayer realizes a financial benefit as a result of a tax-related transaction or event. It can occur in various scenarios, such as when a taxpayer receives a tax refund, takes advantage of tax deductions or credits, or benefits from favorable tax treatment.
Sections 1239, 1244, 1245, and 291 of the Internal Revenue Code (IRC) all involve provisions that recapture or recharacterize a taxpayer's gain in certain situations. However, none of these sections specifically exclude or exempt a taxpayer's gain from recapture or recharacterization.
Section 1239 deals with certain sales or exchanges between related parties involving depreciable property. It applies when there is a gain on the sale or exchange, and it generally treats the gain as ordinary income rather than capital gain.
Section 1244 allows individuals to treat losses from the sale or exchange of small business stock as ordinary losses rather than capital losses. This provision is designed to provide tax relief for investors in small businesses.
Section 1245 relates to the recapture of depreciation deductions taken on tangible personal property, such as equipment or machinery. When the property is sold or disposed of, any gain attributable to the depreciation deductions is treated as ordinary income.
Section 291 pertains to the recapture of certain preferences previously claimed under the Alternative Minimum Tax (AMT). It recaptures a portion of the tax benefits previously obtained under the AMT when certain assets are sold or disposed of. The correct answer is E.
Therefore, none of these sections exclude or exempt a taxpayer's gain from recapture or recharacterization.
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Complete question:
Which of the following section does not recapture or recharacterize a taxpayer's gain? A. Sec. 1239 B. Section 1244 C. Sec. 1245 D. Sec. 291 E. None of these
According to the FCPA, U.S. managers are criminally liable Question 5 options: a) Only for bribes paid in the U.S. and not in other countries where it is common practice in business dealings. b) For bribes paid by foreign agents, if managers know about them. c) For all bribes by employees or agents of the U.S. company even if the U.S. managers do not know about them. d) Only for bribes that they pay directly to a foreign official.
Answers
Answer:
c) For all bribes by employees or agents of the U.S. company even if the U.S. managers do not know about them.
Explanation:
The Foreign Corrupt Practices Act (FCPA) is a federal law of the United States of America that explicitly prohibits its citizens and business firms from engaging in bribery of foreign of foreign government officials in order to gain favors or profit their business. This Act was enacted by the 95th US Congress and signed into law by President Jimmy Carter on the 19th of December, 1977.
A manager can be defined as an individual who is saddled with the responsibility of providing guidance, support, supervision, administrative control, as well as acting as a role model or example to the employees working in an organization by being morally upright.
Generally, managers are typically involved in taking up leadership roles and as such are expected to be build a strong relationship between their employees or subordinates by creating a fair ground for effective communication and sharing of resources and information.
According to the Foreign Corrupt Practices Act (FCPA), managers in the United States of America are criminally liable for all bribes by employees or agents of the U.S. company even if the U.S. managers do not know about them. Thus, ignorance by a manager in the United States of America about a bribe given by one of their employees wouldn't make him or her innocent of the crime committed by the employee.
What is one benefit that you or someone you know receives as a result of government
spending?
I
Answers
Answer:
They are a more reliable means of help in anything.
One benefit is that when my family gets sick, the government pays for the NHS and we can easily get the antibiotics and care for either a lot cheaper or it would be free
An organized group of laws is referred to as a code?
Answers
Answer:
laws. enforceable rules of conduct in a society. code. laws grouped into an organized form. common law.
Use the information provided below to calculate the Internal Rate of Return (expressed to two decimal places) using interpolation. INFORMATION A machine with a purchase price of R1 200 000 is estimated to eliminate manual operations by R400 000 per year. The machine is expected to have a useful life of four years.
Answers
To calculate the Internal Rate of Return (IRR) using interpolation, we need to determine the discount rate at which the net present value (NPV) of the machine's cash flows is zero.
In this case, the machine has a purchase price of R1,200,000 and is estimated to eliminate manual operations by R400,000 per year for a useful life of four years. To calculate the IRR, we need to find the discount rate that makes the NPV of the cash flows equal to zero. Let's set up the equation for NPV: NPV = -Initial Investment + (Cash Flow / (1 + r)^1) + (Cash Flow / (1 + r)^2) + (Cash Flow / (1 + r)^3) + (Cash Flow / (1 + r)^4) Where: Initial Investment = R1,200,000 (negative because it's an outflow) Cash Flow = R400,000 (positive because it's an inflow) r = discount rate (unknown) Now, we need to find the discount rate (r) at which the NPV equals zero. We can use interpolation to approximate the IRR. By trying different discount rates, we can find two rates at which the NPV switches signs (one negative, one positive).
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A(n) _____ identifies how you feel about an activity or subject.
Answers
Answer:
Survey
it questions and identifies how you feel about an activity or subject.
Answer: interest theory
took it on edg.
How do i know if i received the third stimulus payment?.
Answers
Answer:
Use the IRS Get My Payment tool to track stimulus money
For the third stimulus check: It's worth visiting the IRS' online portal designed to track the status of your 2021 payment. Generally, it should tell you when your check will be processed and how you'll receive it: for example, as a paper check in the mail.
Explanation:
suppose you owe a creditor $10,000 due in a single payment in 5 years. how much should your creditor be willing to accept now if he can earn 8% on his money?
Answers
To calculate the worth that a creditor should be helpful to accept now, we ought to solve the equation:
X=10,000/1.085
Solving for X.This equation shows the parity of X and the present significance of $10,000 5 years from now using a rate of 8%.
Solving for X.
X=10,0001.4693
X= 6,805.83 X= 6,805.83
The creditor should be willing to accept $6,805.83 now in exchange for future payment of $10,000 5 years from now
we need to solve the equation:
200,000 = 100,000 × 1.07 x 200,000 = 100,000 × 1.07x
where x is the numeral of years it will bear to double the $100,000 asset (= $200,000 )
Decoding for X.
200,000
100,000 = 1.07x= 2200,000
100,000 = 1.07x= 2
x × log1.07 = log2x × log1.07 = log2
x = log2 log1.07 x= log2 log1.07
x=0.30100.029
4 x= 0.30100.0294
x =10.2448 x=10.2448
It will take 10.2448 years for a $100,000 investment to double with 7% annual interest.
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Williams Auto has a machine that installs tires. The machine is now in need of repair. The machine originally cost $11,400 and the repair will cost $2,400, but the machine will then last two years. The labor cost of operating the machine is $0. 50 per tire. Instead of repairing the old machine, Williams could buy a new machine at a cost of $6,400 that would also last two years; the labor cost would then be reduced to $0. 25 per tire. Williams expects to install 11,400 tires in the next two years. A. Determine the total (two-years) cost for both repairing and replacing the machine
Answers
Williams should fix the equipment because it will cost less overall than to replace it.
What is labor cost?Labor expenses are an employer's total out-of-pocket expenditure for hiring employees.
Williams Auto has a machine that installs tires. Even if the equipment needs maintenance, it will only operate for another two years. Operating the machine costs $0.70 per tire in labor. Instead of repairing the old machine.
1. Total cost of Repair = Repair cost + Operating cost
= $1,700+10,700*$0.70
= $1,700 + $7,490
= $9,1902.
2. Total cost to replace = Repair cost + Operating cost
= $5,700+10,700*$0.5
= $5,700+$5,350
= $11,050
Therefore, Williams should repair the machine.
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What is the difference between a “Named Insured” and a “Driver”?
Answers
Named insured(s) can drive a car, or anyone else's (including rental car) and get into an accident. An additional driver is a person who resides with the named insured and/or regularly uses a shared vehicle. His or her record is used in underwriting the policy to determine rates, but the person has no policy rights.
Jared had studied extremely hard for his math test and believed he had understood the material and memorized the formulas. As he entered the classroom and sat at his desk, he began to worry. He was fearful that he had not prepared enough to do well on the test. The tests were passed out, and he turned his over to begin. As he read the first question, he panicked and his mind went blank. He had a classic case of test anxiety. Which of Jared’s anxiety reactions was physical? He panicked. He began to worry. He was fearful. His mind went blank.
Answers
Answer:
He began to worry.vvv
Explanation:
Answer:
"(A)" not 100% percent sure but I'm 99.9 percent sure it's right because I am very confident in my decision
Explanation:
tell me in the comments if it's right, if it's wrong I'll change my answer as soon I notice but please don't hate because this is what I think
your company is manufacturing a new product , you need to establish a product quality control process. what are three things you must do to create/ establish. your product quality control process? (choose 3). 1.) developing the product website and social media campaign ? 2.) setting up your test market strategy ? 3.) review the results of internal quality assurance testing ? 4.) establish the method to use or testing product quality ? 5.) determine what standards have to be met based on the product and industry ? 6.) publish your test results in a popular professional journal?
Answers
Answer:5,4,and1
Explanation:
if the required reserve ratio
Answers
Answer:
4
Explanation:
Formula: 1 / Reserve money ratio -> 1 / 0.25 = 4
Money encourages specialization by decreasing the .
Answers
Money encourages specialization by decreasing the exchange cost.
The correct option is B.
What is the exchange cost?Exchange cost is the price by which the product is exchanged between the customer and seller.
Money eliminates the double coincidence of desires, allowing for greater specialization and productivity.
As a result, money enables us to make better use of our limited resources by allowing us to generate more in the same number of resources.
This aids in the reduction of scarcity.
Thus, B is the correct option.
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Different cities have different levels of sales tax for items purchased. find each amount of sales tax. what is 10% of $19.90? what is 7% of $20.00?
Answers
The sales tax for 10% of $19.90 is $1.99, because $19.90 x 10/100 = $1.99
7% of $20.00 is $1.40, because $20.00 x 7/100 = $1.40
How do you find the amount of sales tax?To find the amount of sales tax for items purchased at different rates, you can use the following formula:
Sales Tax = Purchase Price * (Tax Rate / 100)
For example, if the purchase price is $19.90 and the tax rate is 10%, the sales tax would be:
$19.90 * (10 / 100) = $1.99
If the purchase price is $20.00 and the tax rate is 7%, the sales tax would be:
$20.00 * (7 / 100) = $1.40
10% of $19.90 is $1.99, because $19.90 x 10/100 = $1.99
7% of $20.00 is $1.40, because $20.00 x 7/100 = $1.40
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What is the difference between a salary and an hourly wage?
Answers
Answer:
Explanation:
A salary stays the same amount no matter how many hours you work. An hourly wage, you get paid for each hour you work; you get payed on WHAT you work.
Which of the following is part of the cost of goods or services sold for a company that paints people's homes?
A. Paint
B. Flyers to promote the company
C. A van to travel to people's homes
D. Fuel for the van
Answers
Answer:
A. Paint
Explanation:
Paint is a part of the cost of goods or services sold for a company that paints people's homes. Thus, the correct option is A). Paint.
What is the cost of goods sold?COGS stands for the Cost of Goods Sold. Cost of goods sold refers to the direct costs of producing the goods sold by a company. It is the total amount or cost that is incurred in the production of the goods. The sum of amount that a business paid as a cost directly related to the sale of products, is known as COGS.
Cost of goods sold is the total carrying value of goods sold during a particular period. This amount mainly includes the cost of the material, labor, machinery etc. that are directly used to create the good. It also includes the indirect cost such as marketing cost, distribution cost, sales cost etc.
Basically, cost of goods sold can be calculated by the given formula i.e. COGS = the starting inventory + purchases – ending inventory.
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I need two answers please by 2pm today.
Are you motivated more by intrinsic rewards (satisfaction, sense of accomplishment, etc.) or by extrinsic rewards (money, bonuses, etc.)?
Answers
Intrinsic rewards can be more satisfying to a worker than extrinsic ones, because internal motivation is something natural that does not depend on external stimuli.
How does an employee get motivated?There is a set of characteristics that helps in motivation in the work environment. Intrinsic rewards correspond to job satisfaction. To be achieved, the employee needs to feel valued and fulfilled with their responsibilities at work.
Extrinsic rewards are related to external motivations, such as a good salary and bonuses.
Therefore, motivation is essential in the workplace, as it stimulates employee productivity, satisfaction and integration.
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which of the following would be needed to block excessive traffic from a particular protocol?
Answers
To block excessive traffic from a particular protocol, the appropriate solution would be to implement a flood guard, option A.
The correct option to block excessive traffic from a particular protocol is A. Flood guard. A flood guard is a security mechanism that helps prevent network flooding attacks. Network flooding occurs when an excessive amount of traffic overwhelms a network, causing degradation or denial of service. Flood guards monitor network traffic patterns and identify abnormal or excessive traffic from a specific protocol. Once detected, the flood guard takes action to block or mitigate the traffic to ensure the network remains stable and operational.
Option B, loop protection, is unrelated to blocking excessive traffic from a particular protocol. Loop protection mechanisms are designed to prevent network loops, which can lead to broadcast storms and network instability.
Option C, ACL (Access Control List), is a network security feature that controls traffic flow based on predefined rules. While ACLs can be used to filter and restrict traffic, they are not specifically designed to block excessive traffic from a particular protocol.
Option D, 802.1X, is an IEEE standard for port-based network access control. It provides authentication and authorization for devices connecting to a network. However, it does not address blocking excessive traffic from a specific protocol; its primary purpose is to control access to the network based on user or device credentials.
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Complete question:
Which of the following would be needed to block excessive traffic from a particular protocol?
A. Flood guard
B. Loop protection
C. ACL
D. 802.1X
Mrs. Singer owns a profitable sole proprietorship. For each of the following cases, use a Schedule SE, Form 1040, to compute her 2020 self-employment tax and her income tax deduction for such tax. Required: Compute 2020 self-employment tax and the income tax deduction for such tax if Mrs. Singer’s net profit from Schedule C was $51,458. She had no other earned income. Compute 2020 self-employment tax and the income tax deduction for such tax if Mrs. Singer’s net profit from Schedule C was $51,458, and she received a $100,000 salary from an employer. Compute 2020 self-employment tax and the income tax deduction for such tax if Mrs. Singer’s net profit from Schedule C was $51,458, and she received a $145,000 salary from an employer.
Answers
Self-employment tax is 15.3% of net self-employment income, consisting of Social Security and Medicare tax. The income tax deduction for self-employment tax is half of the total amount.
Income tax deductionFor the 2020 tax year, the self-employment tax rate is 15.3%, which consists of 12.4% for Social Security tax (up to a maximum of $142,800 of net self-employment income) and 2.9% for Medicare tax (on all net self-employment income).
For each of the three scenarios described, we can calculate Mrs. Singer's self-employment tax and income tax deduction using Schedule SE and Form 1040.
Mrs. Singer's net profit from Schedule C was $51,458, and she had no other earned income:
The self-employment tax on $51,458 of net profit is $7,898.94 ($51,458 x 15.3%).
The income tax deduction for self-employment tax is $3,949.47 (half of the self-employment tax amount).Mrs. Singer will pay income tax on her net profit from Schedule C of $51,458, based on the tax bracket she falls into for her taxable income.Mrs. Singer's net profit from Schedule C was $51,458, and she received a $100,000 salary from an employer:
The self-employment tax on $51,458 of net profit is $7,898.94 ($51,458 x 15.3%).The income tax deduction for self-employment tax is $3,949.47 (half of the self-employment tax amount).Mrs. Singer will pay income tax on her net profit from Schedule C of $51,458, based on the tax bracket she falls into for her taxable income.Mrs. Singer will also pay income tax on her salary of $100,000, based on the tax bracket she falls into for her taxable income.Mrs. Singer's net profit from Schedule C was $51,458, and she received a $145,000 salary from an employer:
The self-employment tax on $51,458 of net profit is $7,898.94 ($51,458 x 15.3%).The income tax deduction for self-employment tax is $3,949.47 (half of the self-employment tax amount).Because Mrs. Singer's salary is above the Social Security tax wage base of $142,800, she will not owe Social Security tax on her net self-employment income.However, she will still owe Medicare tax on her net self-employment income, which amounts to $1,489.24 ($51,458 x 2.9%).Mrs. Singer will pay income tax on her net profit from Schedule C of $51,458, based on the tax bracket she falls into for her taxable income.Mrs. Singer will also pay income tax on her salary of $145,000, based on the tax bracket she falls into for her taxable income.Therefore, self-employment tax is 15.3% of net self-employment income, consisting of Social Security and Medicare tax. The income tax deduction for self-employment tax is half of the total amount.
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