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What is mason self-employment tax liability

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Reference no: EM133551047

Case Study: Mason (single) is a 50 percent shareholder in Angels Corporation (an S Corporation). Mason receives a $192,000 salary working full time for Angels Corporation. Angels Corporation reported $448,000 of taxable business income for the year (2023). Before considering his business income allocation from Angels and the self-employment tax deduction (if any), Mason's adjusted gross income is $192,000 (all salary from Angels Corporation). Mason claims $74,000 in itemized deductions. Answer the following questions for Mason.

Questions:

a. What is Mason's self-employment tax liability?

b. Assuming the business income allocated to Mason is income from a specified service trade or business, what is Mason's deduction for qualified business income? Ignore the wage-based limitation when computing the deduction.

c. Assume the same facts as question (b), except that Angels Corporation reported $198,000 of taxable business income for the year. What is Mason's deduction for qualified business income? Ignore the wage-based limitation when computing the deduction.

d. Assuming the original facts, what is Mason's net investment income tax liability (assume no investment expenses)?

e. Assuming the original facts, what is Mason's additional Medicare tax liability?

 

 

 

Reference no: EM133551047

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