James Felon is a self-employed surfboard-maker in 2020. His Schedule C net income is $162,400 for the year. He also has a part-time job and earns $9,744 in wages subject to FICA taxes.
Calculate James' self-employment tax for 2020 using page 1 of Schedule SE.
Note: If required, round amounts to the nearest dollar. Enter all amounts as positive numbers.
4a 4a If line 3 is more than zero, multiply line 3 by 92.35% (0.9235). Otherwise, enter amount from line 3. . Note: If line 4a is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. 4b b If you elect one or both of the optional methods, enter the total of lines 15 and 17 here ........ C Combine lines 4a and 4b. If less than $400, stop; you don't owe self-employment tax. Exception: If less than $400 and you had church employee income, enter -- and continue 40 5a Enter your church employee income from Form W-2. See instructions for definition of church employee income... 5a b Multiply line 5a by 92.35% (0.9235). If less than $100, enter-O- 5b 6 Add lines 4c and 5b .. 6 7 Maximum amount of combined wages and self-employment earnings subject to social security tax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax for 2020., 7 137,700 8a 17,074.8 x 8a Total social security wages and tips (total of boxes 3 and 7 on Form(s) W- 2) and railroad retirement (tier 1) compensation. If $137,700 or more, skip lines 8b through 10, and go to line 11...... b Unreported tips subject to social security tax from Form 4137, line 10 C Wages subject to social security tax from Form 8919, line 10..... 8b 8c d Add lines 8a, 8b, and 8c.... 8d 9 Subtract line 8d from line 7. If zero or less, enter -- here and on line 10 and go to line 11. 9 10 Multiply the smaller of line 6 or line 9 by 12.4% (0.124).. 10 11 Multiply line 6 by 2.9% (0.029) 11 4a 4a If line 3 is more than zero, multiply line 3 by 92.35% (0.9235). Otherwise, enter amount from line 3. . Note: If line 4a is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. 4b b If you elect one or both of the optional methods, enter the total of lines 15 and 17 here ........ C Combine lines 4a and 4b. If less than $400, stop; you don't owe self-employment tax. Exception: If less than $400 and you had church employee income, enter -- and continue 40 5a Enter your church employee income from Form W-2. See instructions for definition of church employee income... 5a b Multiply line 5a by 92.35% (0.9235). If less than $100, enter-O- 5b 6 Add lines 4c and 5b .. 6 7 Maximum amount of combined wages and self-employment earnings subject to social security tax or the 6.2% portion of the 7.65% railroad retirement (tier 1) tax for 2020., 7 137,700 8a 17,074.8 x 8a Total social security wages and tips (total of boxes 3 and 7 on Form(s) W- 2) and railroad retirement (tier 1) compensation. If $137,700 or more, skip lines 8b through 10, and go to line 11...... b Unreported tips subject to social security tax from Form 4137, line 10 C Wages subject to social security tax from Form 8919, line 10..... 8b 8c d Add lines 8a, 8b, and 8c.... 8d 9 Subtract line 8d from line 7. If zero or less, enter -- here and on line 10 and go to line 11. 9 10 Multiply the smaller of line 6 or line 9 by 12.4% (0.124).. 10 11 Multiply line 6 by 2.9% (0.029) 11
