1. Emily is a self-employed attorney during 2015 and she has no other work. Assuming that Emily's net profits from her practice are $50,000, calculate the total amount of her self-employment tax liability for 2015. Show your math or zero points will be given --- even if your answer is correct.
2. Carol Harris, Ph.d, CPA is full time accounting professor but she maintains a sole-practitioner CPA practice on the side.
Her wages as a professor are $60,000.
She did NOT receive any wages using Form 8919 (Uncollected Social Security and Medicare Tax on Wages) and she did NOT receive any other unreported income (i.e. tips, etc.). She is also NOT a member of a religion with IRS permission to not be taxed for self-employment purposes, she is NOT using an optional method for calculating earnings, and she is NOT a church employee.
Her CPA practice has the following income and expenses:
Income
Fees from clients - $44,000
Expenses
Office rent - $4,000
Supplies - $1,000
Computer tax service - $2,000
Mileage - $1,000 (assume this amount is correct)
Telephone - $1,500
Other Expenses - $1,600
These are all legitimate, ordinary & necessary business costs. She has no employees.
Using the above information, prepare Carol's Schedule SE for 2015 in Adobe PDF and turn it in to me.
Hint-consider whether Carol may use the 'short form' option on Schedule SE.
You do NOT need to prepare ANY other Federal or California forms for this assignment. Using Schedule C is optional to calculate her self-employment income and might be helpful but don't bother turning it in to me if you do use it.
3. Sam's 2014 tax liability was $8,000. He estimates his annual tax liability in 2015 to be $10,000 (earned evenly through the year). He has no taxes withheld because he is self-employed. How much is Sam's first quarter payment for 2015? Show your math or no credit, even if it is correct.
This calculation is for income taxes ONLY. Assume Sam wants his payment to be as small as possible but still enough to avoid penalties and his AGI is under $150,000 in all years.