Reference no: EM132651920

Question - Introduction to FICA & SECA Tax

Mary is a single taxpayer who has income of $150,000 in 2018. Please use the tax rates and wage base limits applicable to FICA, SECA, and NIIT, as applicable, as described in the "FICA and SECA Taxes in a Nutshell" article and in the Packet (part 1) to complete the following calculations.

Calculate Mary's FICA tax obligation assuming she received this income as employee wages.

Now calculate Mary's SECA tax obligation assuming she received this income as an independent contractor again using the tax rates and wage base limit applicable to SECA as described in the nutshell article.

Assume that, in addition to the $150,000 of income, Mary also earns $500,000 in capital gains from investments. Calculate any applicable Net Investment Income Tax (NIIT) on the $500K in earnings.