Calculate the total Social Security and Medicare tax burden

Calculate the total Social Security and Medicare tax burden on a sole proprietorship earning 2017 profit of $300,000, assuming a single sole proprietor. (Round your intermediate calculations to the nearest whole dollar amount.)

Solution

Answer)

The self employment tax is 15.3% of which 12.4% for social security and 2.9% for Medicare tax burden and 0.9235 of you income will be considered as base.

I.e taxable self employment income

=$300000×0.9235=$277050

Total social security and Medicare tax burden (as it mentioned in question as total I will considered it as an aggregate):

$277050×15.3%=$42388.65 [of which $34354.2[i.e $277050×12.4%) is social security tax burden and $8034.45 (i.e $277050×2.9%) is Medicare tax burden]