Lara started a self-employed consulting business in the last part of the year and earned $60,000 of self- employment earnings. She had been employed as manager in a consulting firm prior to starting her own business and had earned $175,000.a.What is Lara's Additional Medicare Tax, if any?b.What is Lara's deduction for AGI for the Additional Medicare Tax?
What will be an ideal response?
| Threshold | $200,000 |
| Less wages | -175,000 |
| Remaining threshold | $ 25,000 |
| Net self-employment income: $60,000 × .9235 | $ 55,410 |
| Less remaining threshold | -25,000 |
| SE income subject to tax | $ 30,410 |
| ? | × 0.9% |
| a. Additional Medicare Tax | $ 274 |
| b. | There is no deduction for the Additional Medicare Tax. |
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