Use the following tax rates, ceiling, and maximum taxes:

Line Item Description Amount Amount Amount

Employee and Employer OASDI: $6\mathrm{.}20\%$ $$160,200$ $$9,932\mathrm{.}40$

Employee$*$ and Employer HI: $1\mathrm{.}45\%$ No limit No maximum

Self$-$employed OASDI: $12\mathrm{.}4\%$ $$160,200$ $$19,864\mathrm{.}80$

Self$-$employed HI: $2\mathrm{.}9\%$ No limit No maximum

$*$Employee HI: Plus an additional $0\mathrm{.}9\%$ on wages over $$200,000.$ Also applicable to self$-$employed.

Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows:

Carry the hourly rate and the overtime rate to $3$ decimal places and then round off to $2$ decimal places $($round the hourly rate to $2$ decimal places before multiplying by one and one$-$half to determine the overtime rate$).$

If the third decimal place is $5$ or more, round to the next higher cent.

If the third decimal place is less than $5,$ drop the third decimal place.

Also, use the minimum hourly wage of $$7\mathrm{.}25$ in solving these problems and all that follow.

Ralston is the sole proprietor of Cut & Curl. During the year, his net earnings were $$79,700.$ What are his self$-$employment taxes $($OASDI and HI$)$ on these earnings? Round your answer to the nearest cent.

fill in the blank $1$ of $1$

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