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Leya [2.2K]
3 years ago
9

Eva received $60,000 in compensation payments from JAZZ Corp. during 2020. Eva incurred $5,000 in business expenses relating to

her work for JAZZ Corp. JAZZ did not reimburse Eva for any of these expenses. Eva is single and she deducts a standard deduction of $12,400. Based on these facts, answer the following questions: Use Tax Rate Schedule for reference. (Leave no answer blank. Enter zero if applicable.) d. Assume that Eva is considered to be a self-employed contractor. What is her regular tax liability for the year
Business
1 answer:
Pavlova-9 [17]3 years ago
7 0

Answer:

d. Assume that Eva is considered to be a self-employed contractor. What is her regular tax liability for the year

Since Eva's standard deduction is $12,000, then we must assume that we are dealing with income earned during 2018.

Eva's AGI = $60,000 - $5,000 (business expenses) = $55,000 - (7.65% x $55,000 for self employer taxes) - $12,000 (standard deduction) = $38,792.50

Eva's tax liability:

  • $9,700 x 10% = $970
  • 12% x ($38,700 - $9,700) = $3,480
  • 22% x ($38,792.50 - $38,700) = $20.35
  • total tax liability = $4,470.35
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