Stewart Beauf is a self-employed surfboard maker in 2018. His Schedule C net income is $125,003 for the year. He also has a part-time job and earns $15,600 in wages subject to FICA taxes.

Calculate Stewarts self-employment tax for 2018 using Schedule SE.

If required, round amounts to the nearest dollar. Enter all amounts as positive numbers. If a line item does not require an entry or the answer is zero, enter "0".

Problem 6-16 Self-Employment Tax (LO 6.6) Stewart Beauf is a self-employed surfboard maker in 2018. His Schedule C net income is $125,003 for the year. He also has a part-time job and earns $15,600 in wages subject to FICA taxes. Calculate Stewart's self-employment tax for 2018 using Schedule SE. If required, round amounts to the nearest dollar. Enter all amounts as positive numbers. If a line item does not require an entry or the answer is zero, enter "0". OMB No. 1545-0074 2018 SCHEDULE SE (Form 1040) Self-Employment Tax Department of the Go to for instructions and the latest information. Treasury Internal Attach to Form 1040 or Form 1040NR. Revenue Service (99) Name of person with self-employment income (as shown on Form 1040 or Social security number of person Form 1040NR) with self-employment income Stewart Beauf Attachment Sequence No. 17 Before you begin: To determine if you must file Schedule SE, see the instructions. May I Use Short Schedule SE or Must I Use Long Schedule SE? Note. Use this flowchart only if you must file Schedule SE. If unsure, see Who Must File Schedule SE in the instructions. Did you receive wages or tips in 2018? Yes Did you receive wages or tips in 2018? Yes Yes Yes Are you a minister, member of a religious order, or Christian Science practitioner who received IRS approval not to be taxed on earnings from these sources, but you owe self-employment tax on other earnings? Was the total of your wages and tips subject to social security or railroad retirement (tier 1) tax plus your net earnings from self-employment more than $128,400? No | No Yes Yes Are you using one of the optional methods to figure your net earnings (see instructions)? Did you receive tips subject to social security or Medicare tax that you didn't report to your employer? No | No Yes No Did you receive church employee income (see instructions) reported on Form W-2 of $108.28 or more? Did you report any wages on Form 8919, Uncollected Social Security and Medicare Tax on Wages? No You may use Short Schedule SE below You must use Long Schedule SE on page 2 Section A-Short Schedule SE. Caution: Read above to see if you can use Short Schedule SE. la Net farm profit or loss) from Schedule F, line 34, and farm partnerships, Schedule K-1 (Form 1065), box 14, code A.... b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve Program payments included on Schedule F, line 4b, or listed on Schedule K-1 (Form 1065), box 20, code AH............ 2 Net profit or loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065), box 14, code A (other than farming); and Schedule K-1 (Form 1065-B), box 9, code J1. Ministers and members of religious orders, see instructions for types of income to report on this line. See instructions for other income to report Combine lines 1a, 1b, and 2. income to report . . . . ... . .. .. . . .. .. . .. .. .. .. .. .. .. . . .. . .. . 3 4 Multiply line 3 by 92.35% (0.9235). If less than $400, you don't owe self-employment tax; don't file this schedule unless you have an amount on line 1b ........ Note: If line 4 is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. 5 Self-employment tax. If the amount on line 4 is: $128,400 or less, multiply line 4 by 15.3% (0.153). Enter the result here and on Schedule 4 (Form 1040), line 57, or Form 1040NR, line 55 . More than $128,400, multiply line 4 by 2.9% (0.029). Then, add $15,921.60 to the result. Enter the total here and on Schedule 4 (Form 1040), line 57, or Form 1040NR, line 55 6 Deduction for one-half of self-employment tax. Multiply line 5 by 50% (0.50). Enter the result here and on Schedule 1 (Form 1040), line 27, or Form 1040NR, line 27 ................1 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 11358Z Schedule SE (Form 1040) 2018 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 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-..... 6 Add lines 4c and 5b ....... 1 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 2018.. 128,400 00 8a 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 $128,400 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 .... 9 Subtract line 8d from line 7. If zero or less, enter -- here and on line 10 and go to line 11. 10 Multiply the smaller of line 6 or line 9 by 12.4% (0.124) ........ 11 Multiply line 6 by 2.9% (0.029) ......... 12 Self-employment tax. Add lines 10 and 11. Enter here and on Schedule 4 (Form 1040), line 57, or Form 1040NR, line 55. 13 Deduction for one-half of self-employment tax. Multiply line 12 by 50% (0.50). Enter the result here and on Schedule 1 (Form 1040), line 27, or Form 1040NR, line 27 ............... Part II Optional Methods To Figure Net Earnings (see instructions) Part IT Optional Methods To Figure Net Earnings (see instructions) Farm Optional Method. You may use this method only if (a) your gross farm income? wasn't more than $7,920, or (b) your net farm profits were less than $5,717 ........ 14 Maximum income for optional methods ....... 5,280 00 15 Enter the smaller of: two-thirds (2/3) of gross farm income? (not less than zero) or $5,280. Also include this amount on line 4b above.. un Nonfarm Optional Method. You may use this method only if (a) your net nonfarm profits were less than $5,717 and also less than 72.189% of your gross nonfarm income, and (b) you had net earnings from self- employment of at least $400 in 2 of the prior 3 years. Caution: You may use this method no more than five times.......... 16 16 Subtract line 15 from line 14 ... 17 Enter the smaller of: two-thirds (2/3) of gross nonfarm income4 (not less than zero) or the amount on line 16. Also include this amount on line 4b above ................. 1 From Sch. F, line 9, and Sch. K-1 (Form 1065), box 14, code B. 3 From Sch. C, line 31; Sch. C-EZ, line 3; Sch. K-1 (Form 1065), box 14, code A; and Sch. K-1 (Form 1065-B), box 9, code Ji. 2 From Sch. F, line 34, and Sch. K-1 (Form 1065), box 14, code A 4 From Sch. C, line 7; Sch. C-EZ, line 1; Sch. K-1 (Form 1065), box 14, -minus the amount you would have entered on line 1b had you code C; and Sch. K-1 (Form 1065-B), box 9, code 22. not used the optional method. Schedule SE (Form 1040) 2018 Problem 6-16 Self-Employment Tax (LO 6.6) Stewart Beauf is a self-employed surfboard maker in 2018. His Schedule C net income is $125,003 for the year. He also has a part-time job and earns $15,600 in wages subject to FICA taxes. Calculate Stewart's self-employment tax for 2018 using Schedule SE. If required, round amounts to the nearest dollar. Enter all amounts as positive numbers. If a line item does not require an entry or the answer is zero, enter "0". OMB No. 1545-0074 2018 SCHEDULE SE (Form 1040) Self-Employment Tax Department of the Go to for instructions and the latest information. Treasury Internal Attach to Form 1040 or Form 1040NR. Revenue Service (99) Name of person with self-employment income (as shown on Form 1040 or Social security number of person Form 1040NR) with self-employment income Stewart Beauf Attachment Sequence No. 17 Before you begin: To determine if you must file Schedule SE, see the instructions. May I Use Short Schedule SE or Must I Use Long Schedule SE? Note. Use this flowchart only if you must file Schedule SE. If unsure, see Who Must File Schedule SE in the instructions. Did you receive wages or tips in 2018? Yes Did you receive wages or tips in 2018? Yes Yes Yes Are you a minister, member of a religious order, or Christian Science practitioner who received IRS approval not to be taxed on earnings from these sources, but you owe self-employment tax on other earnings? Was the total of your wages and tips subject to social security or railroad retirement (tier 1) tax plus your net earnings from self-employment more than $128,400? No | No Yes Yes Are you using one of the optional methods to figure your net earnings (see instructions)? Did you receive tips subject to social security or Medicare tax that you didn't report to your employer? No | No Yes No Did you receive church employee income (see instructions) reported on Form W-2 of $108.28 or more? Did you report any wages on Form 8919, Uncollected Social Security and Medicare Tax on Wages? No You may use Short Schedule SE below You must use Long Schedule SE on page 2 Section A-Short Schedule SE. Caution: Read above to see if you can use Short Schedule SE. la Net farm profit or loss) from Schedule F, line 34, and farm partnerships, Schedule K-1 (Form 1065), box 14, code A.... b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve b If you received social security retirement or disability benefits, enter the amount of Conservation Reserve Program payments included on Schedule F, line 4b, or listed on Schedule K-1 (Form 1065), box 20, code AH............ 2 Net profit or loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065), box 14, code A (other than farming); and Schedule K-1 (Form 1065-B), box 9, code J1. Ministers and members of religious orders, see instructions for types of income to report on this line. See instructions for other income to report Combine lines 1a, 1b, and 2. income to report . . . . ... . .. .. . . .. .. . .. .. .. .. .. .. .. . . .. . .. . 3 4 Multiply line 3 by 92.35% (0.9235). If less than $400, you don't owe self-employment tax; don't file this schedule unless you have an amount on line 1b ........ Note: If line 4 is less than $400 due to Conservation Reserve Program payments on line 1b, see instructions. 5 Self-employment tax. If the amount on line 4 is: $128,400 or less, multiply line 4 by 15.3% (0.153). Enter the result here and on Schedule 4 (Form 1040), line 57, or Form 1040NR, line 55 . More than $128,400, multiply line 4 by 2.9% (0.029). Then, add $15,921.60 to the result. Enter the total here and on Schedule 4 (Form 1040), line 57, or Form 1040NR, line 55 6 Deduction for one-half of self-employment tax. Multiply line 5 by 50% (0.50). Enter the result here and on Schedule 1 (Form 1040), line 27, or Form 1040NR, line 27 ................1 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 11358Z Schedule SE (Form 1040) 2018 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 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-..... 6 Add lines 4c and 5b ....... 1 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 2018.. 128,400 00 8a 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 $128,400 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 .... 9 Subtract line 8d from line 7. If zero or less, enter -- here and on line 10 and go to line 11. 10 Multiply the smaller of line 6 or line 9 by 12.4% (0.124) ........ 11 Multiply line 6 by 2.9% (0.029) ......... 12 Self-employment tax. Add lines 10 and 11. Enter here and on Schedule 4 (Form 1040), line 57, or Form 1040NR, line 55. 13 Deduction for one-half of self-employment tax. Multiply line 12 by 50% (0.50). Enter the result here and on Schedule 1 (Form 1040), line 27, or Form 1040NR, line 27 ............... Part II Optional Methods To Figure Net Earnings (see instructions) Part IT Optional Methods To Figure Net Earnings (see instructions) Farm Optional Method. You may use this method only if (a) your gross farm income? wasn't more than $7,920, or (b) your net farm profits were less than $5,717 ........ 14 Maximum income for optional methods ....... 5,280 00 15 Enter the smaller of: two-thirds (2/3) of gross farm income? (not less than zero) or $5,280. Also include this amount on line 4b above.. un Nonfarm Optional Method. You may use this method only if (a) your net nonfarm profits were less than $5,717 and also less than 72.189% of your gross nonfarm income, and (b) you had net earnings from self- employment of at least $400 in 2 of the prior 3 years. Caution: You may use this method no more than five times.......... 16 16 Subtract line 15 from line 14 ... 17 Enter the smaller of: two-thirds (2/3) of gross nonfarm income4 (not less than zero) or the amount on line 16. Also include this amount on line 4b above ................. 1 From Sch. F, line 9, and Sch. K-1 (Form 1065), box 14, code B. 3 From Sch. C, line 31; Sch. C-EZ, line 3; Sch. K-1 (Form 1065), box 14, code A; and Sch. K-1 (Form 1065-B), box 9, code Ji. 2 From Sch. F, line 34, and Sch. K-1 (Form 1065), box 14, code A 4 From Sch. C, line 7; Sch. C-EZ, line 1; Sch. K-1 (Form 1065), box 14, -minus the amount you would have entered on line 1b had you code C; and Sch. K-1 (Form 1065-B), box 9, code 22. not used the optional method. Schedule SE (Form 1040) 2018