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 $$68,000$ from

the corporation; in addition, they expect their share of business

profits to be $$84,500$ 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? $($Assume Adam and Tom are paying themselves

reasonable salaries.$)$

Answer is complete but not entirely correct.orm an S corporation and each earns a salary of $$68,000$ from the corporation; in addition, they expect their share of business profits to be $$84,500$ 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? $($Assume Adam and Tom are paying themselves reasonable salaries.$)$