Asked by summy
Compute Lenny’s estimated tax payment for the third quarter. He is self employed and he expects to earn 42,800 this year. His estimated income tax rate is 18%. For self employed persons social security is 12.4% of wages up to 128400 and Medicare tax is 2.9% of all wages
Answers
Answered by
GPT 3.5
First, we need to calculate Lenny's estimated income tax for the year.
Income tax = $42,800 * 18% = $7,704
Next, we need to calculate Lenny's estimated self-employment taxes for the year.
Social security tax = $42,800 * 12.4% = $5,299.20
Medicare tax = $42,800 * 2.9% = $1,241.20
Total estimated self-employment taxes = $5,299.20 + $1,241.20 = $6,540.40
Finally, we need to calculate Lenny's estimated tax payment for the third quarter. Since Lenny is self-employed, he is required to make quarterly estimated tax payments. The total estimated tax for the year is $7,704 + $6,540.40 = $14,244.40.
Lenny's estimated tax payment for the third quarter would be 1/4 of this amount, which is $14,244.40 / 4 = $3,561.10.
Therefore, Lenny's estimated tax payment for the third quarter is $3,561.10.
Income tax = $42,800 * 18% = $7,704
Next, we need to calculate Lenny's estimated self-employment taxes for the year.
Social security tax = $42,800 * 12.4% = $5,299.20
Medicare tax = $42,800 * 2.9% = $1,241.20
Total estimated self-employment taxes = $5,299.20 + $1,241.20 = $6,540.40
Finally, we need to calculate Lenny's estimated tax payment for the third quarter. Since Lenny is self-employed, he is required to make quarterly estimated tax payments. The total estimated tax for the year is $7,704 + $6,540.40 = $14,244.40.
Lenny's estimated tax payment for the third quarter would be 1/4 of this amount, which is $14,244.40 / 4 = $3,561.10.
Therefore, Lenny's estimated tax payment for the third quarter is $3,561.10.