Alice is single and self-employed in 2019. Her net business profit on her Schedule C for the year is $150,000. What is her self-employment tax liability and additional Medicare tax liability for 2019? (Round your final answer to the nearest whole dollar amount. Leave no answer blank.)

She is not subjected to additional medicare tax.

Explanation:

A taxpayer's tax base for computing a self-employed taxpayer's self-employment tax (i.e., net earnings from self employment) is the taxpayer's net business profit from schedule C multiplied by 92.35%

so, Alice's net earnings from self-employment is her net profit from schedule c of $150,000 × 92.35% = $138,525.

Alice will owe ($138,525 × 2.9%) $4018 for the Medicare components of FICA taxes and $15, 922 ($128,400 maximum amount × 12.4%) $15,0922.

Alice owes total self-employment tax of ($15, 922 + $4018) = $19,940. she is not subject to the additional Medicare tax because her net earnings from self-employment do not exceed $200,000.

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