Adam Fleeman, a skilled carpenter, started a home improvement business with Tom Collins, a master plumber. Adam and Tom are concerned about the payroll taxes they will have to pay. Assume they form an S corporation and each earns a salary of $86,000 from the corporation; in addition, they expect their share of business profits to be $63,250 each.

How much Social Security tax and Medicare tax (or self-employment tax) will Adam, Tom, and their corporation have to pay on their salary and profits?

FICA

Adam _______________________

Tom _______________________

S Corporation _______________________

I calculated Adam & Tom 4859 (86000*5.65%)

S Corporation 6579(86000*7.65%)

It's not correct