(1)Question: How much is mikes self-employment tax in? show the work in excel

(2) question how much could mike contribute for himself in 2020 if he set up a safe-harbor 401-k plan?

show work in excel and i will vote you up!

MIKE AND MARIA ROMAN Mike and Maria have come to you, a financial planner for help in developing a plan to accomplish their financial goals. From your initial meeting together, you have gathered the following information. PERSONAL BACKGROUND AND INFORMATION COLLECTED The Family Mike and Maria Roman live in the country and operate a baseball academy on their property. They have a quaint home with a baseball field to the left of their house and two covered baseball batting and pitching cages. Mike played professional baseball for 15 years and now provides baseball instruction through RBI to children ages six to the early twenties. Mike currently coaches several college baseball players and is one of the most respected hitting and pitching coaches in the area. He also coaches a 9-year-old team and a 14-year-old team, both competing at the major division level. Maria has the tireless job of scheduling all of the lessons. 1 Mike and Maria Roman Mike is 44 years old and loves his job. He is also an avid hunter and fisherman. Maria is also 44 years old and has done a wonderful job of raising their two kids, while helping with the family business. The Children Emily is 20 years old and is a Junior at Florida State University where she is double majoring in anthropology and communications. She has always been an excellent student and has a full academic scholarship. She also works part time to earn additional spending money. Her brother, Michael, is 17 years old and is a junior at Mission High School, where he plays shortstop on the baseball team and is hitting over 300 for the year. Roman's Baseball Institute (RBI) Mike started RBI seven years ago after he left professional baseball. He has built his reputation, as well as that of RBI over that time period. RBI is one of the premier baseball academies in the area. The primary source of income for RBI is fees from baseball lessons. Lessons are priced at $70 per hour. Mike has three other coaches who help him provide lessons (Mickey, Mr. Joe, and Joey). His dad, Mickey, who is now retired from the Post Office, taught him how to play baseball, coached him growing up, and works with him now that he is retired. Mr Joe also coached Mike as a child and now coaches for Mike. Joey is 20 years old, played baseball for Mike growing up and played in college during his freshman year before getting injured. RBI generates $245,000 in gross annual revenue and has the following expenses: Coaching fees to his coaches $60,000 Utilities $2,500 Field Maintenance $7,000 Equipment (balls, etc.) $1,000 Other Expenses $3,000 Mike works 1,500 hours and the other coaches total 2,000 hours. His three coaches work the following number of hours and are paid $30 per hour: Personal and Financial Objectives for Mike and Maria Roman 1. Provide for retirement. They would like to retire when Mike is age 60. They want to plan on $100,000 of retirement income in today's dollars. They expect to receive Social Security and Mike has a pension with Major League Baseball (MLB). They would like to plan on funding potential retirement expenditures until they turn age 95 and would like to maintain the same level of spending, even if Mike or Maria died early. 2. Provide for the cost of Michael's college education. They expect Michael to receive a partial baseball scholarship, but they plan on paying $15,000 per year for each of his five years for college. 3. Establish a retirement plan for the income he earns at RBI. EXTERNAL INFORMATION Economic Information Inflation is expected to be 3.0% annually. There is no state income tax. The yield curve is slightly upward sloping, but relatively flat. . . The historic and expected correlation between the equity markets in the modernized countries is relatively high. The correlation between these markets increase especially during economic crisis. They have a required rate of return of 9 percent. The economy is in a steady slow growth expansion phase with moderate unemployment. Bank Lending Rates 15-year mortgage rate is 5.0%. 30-year mortgage rate is 6.0%. Secured personal loan rate is 10.0%. Education Information Mike and Maria believe strongly in education. They want Michael to attend a college for learning. as well as baseball. As mentioned, they expect to fund $15,000 per year for five years in today's dollars for Michael's education. Tuition has been increasing at a 7 percent rate, which is expected to continue indefinitely INTERNAL INFORMATION Insurance Information Life Insurance Policy A Policy B Insured Mike Maria Face Amount $150,000 $40,000 Type Term Term Cash Value $0 $0 Monthly Premium $156 $50 Who pays premium Mike Mike Beneficiary Maria Mike Policy Owner Mike Maria Settlement options clause selected None None I Health Insurance Mike and Maria are covered under the Major League Baseball policy. The plan includes a family deductible of $12,600 at a cost of $500 per month Long-Term Disability Insurance Neither Mike nor Maria are covered by any disability insurance. Homeowners Insurance The Romans have a H03 policy with endorsements for replacement value and open perils for personal property. The current dwelling coverage is 100% replacement value with an inflation rider . Automobile Insurance Both of their cars are covered. Type PAP Bodily injury $100,000/5300,000 Property Damage $50,000 Medical Payments $5,000 per person Physical Damage Actual Cash Value Uninsured Motorist Bodily Injury $100,000/$300,000 I Uninsured Motorist Property Damage 550,000 Comprehensive Deductible $1,000 Collision Deductible $1,000 Premium (annual) $3,300 Personal Liability Insurance . Neither Mike nor Maria have PLUP coverage Income Tax Information The Romans filing status for their federal income tax return is married filing jointly. Retirement Information Mike would like to retire at age 60 and quit working. Mike met the requirements for the MLB minimum pension of $34,000 per year, which is what he expects to receive. This pension begins at age 62 and the amount is fixed for life (both his and his spouse's life). It is not inflation adjusted from today or during retirement Mike expects his Social Security benefits will equal $30,000 in today's dollars at full retirement age, which is age 67. Maria does not have 40 quarters of Social Security coverage Gifts, Estates, Trusts, and will Information Neither Mike nor Maria have prepared a will or any other estate planning documents Mickey Roman Mickey is Mike's dad and is an "old school baseball coach. He turned 70 on December 22, 2018. He has a pension payment from the USPS of $2,000 per month and he and his wife receives a monthly payment from Social Security of $2,200. He also has an IRA with a balance of $85,000 as of December 31, 2019, Since his wife will continue to receive Social Security and his pension in the event he dies, he has named his grandson Michael as the beneficiary of his IRA. Mickey also has Exxon stock that was distributed from a qualified plan 30 years ago. The distribution was a lump-sum distribution in which the FMV of the stock from the plan was $100,000. Mickey deposited the stock in his brokerage account and included $20,000 in his taxable income in the year of the distribution, based on the Form 1099 R. Mickey still owns the stock, which is now worth $324,340 and is held in the same brokerage account. He is hoping to leave it to Mike when he dies. 866 Chapter 15 em Sets and the MIES Maria Roman Cam Financial Statements Statement of Income and Expenses Statement of Income and Expenses Mike and Maria Roman Statement of Income and Expenses for 2019 and Expected (Approximate) For 2020 CASH INYLOWS Totals Salaries RBI Gross Revenue $245,000 Total Cash Inflows $245,000 CASH OUTFLOWS Taxes Federal Estimated Tax Payments $40,000 Property Tax Principal Residence & Land $10,000 $50,000 Debt Payments Principal Residence $22,547 Auto Loan - Jeep $3,488 Auto Loan - Ram $7,968 Credit Card Payments $13,000 Total Debt Payments $47,002 Living Expenses Utilities Principal Residence $3,900 Gasoline for Autos $3,500 Gifts $1,000 Entertainment $1,750 Vacations $2,000 Church Donations $500 Clothing $2,000 Auto Maintenance $2,000 Satellite TV $2,000 Food $4,650 Total Living Expenses $23,300 RBI Expenses Fees Paid to the Three RBI Coaches $60,000 Utilities for Batting Cages $2,500 Baseball Field Maintenance $7,000 Baseball Equipment $1,000 Other Baseball Business Expenses $3,000 Total RBI Expenses $73,500 Insurance Payments MLB Health Insurance Premium $6,000 HO Insurance Principal Residence $3,000 Auto Insurance Premiums $3,300 Life Insu nce Premiums (Policy A&B) $2.472 Total Insurance Payments $14,772 Total Cash Outflows $208,574 NET DISCRETIONARY CASH FLOWS $36,426 Statement of Financial Position 1/1/2020 Assets' Cash and Cash Equivalents Cash Savings Account Total Cash and Cash Equivalents Investment Assets Brokerage Account Municipal Bond Portfolio Education Portfolio IRA Total Investment Assets Statement of Financial Position Mike and Maria Roman Balance Sheet as of 1/1/2020 Liabilities and Net Worth Liabilities? $5,000 Home Mortgage $307,808 $25,000 Credit Card Balance Visa $2,000 $30,000 $1,200 Auto Loan - Mike $26.444 $70,000 Auto Loan - Maria? $9,918 $20,000 Total Liabilities $10,000 $20,000 $120,000 Total Net Worth $347,370 $335,630 Personal Use Assets Personal Residence Land for Home & Baseball Field Jeep - Maria Ram Truck - Mike Furniture & Personal Property Total Personal Use Assets Total Assets $200,000 $200,000 $18,000 $35,000 $80,000 $533,000 $683,000 Total Liabilities & Net Worth $683,000