Details Amount ($)

Interest income 23,900

Schedule C Net profit 58,040

Gross Income 81,940

Less Self employment tax (50%)* (4,100)* Adjusted Gross Income (AGI) 77,840

Less: Higher of standard deduction or Itemized deduction (12,550)

Taxable income before QBI 65,290

Less: Qualified Business Income (QBI) deduction (58,040 - 4,100) x 20% (10,788)

Taxable Income 54,502

Income tax* 7,739*

*50% of Self employment tax = {(58,040 x 92.35%) x 15.3%} x 50% = $4,100

*Income tax = (9,950 x 10%) + {(40,525 - 9,950) x 12%} + {(54,502 - 40,525) x 22%} = $995 + $3,669 + $3,075 = $7,739*

Please explain the 92.35% in the 50% off SE tax calculation