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Reba owns "Reba's Kitchen Supplies" and sells gourmet kitchen supplies out of her home. She is considered a sole proprietor and uses the cash basis...
Reba owns "Reba's Kitchen Supplies" and sells gourmet kitchen supplies out of her home. She is considered a sole proprietor and uses the cash basis method of accounting in her business. During 2018, she paid quarterly federal income tax payments totaling $5,000. Her net income is considered qualified business income. Her income and expenses are below: Sales $95,000 Cost of goods sold 40,000 Insurance 2,500 Legal 850 Advertising 200 Additional information regarding the kitchen supply business is below: A. Purchased equipment during 2018 for $10,000 and wishes to take the maximum depreciation deduction B. Drove 2010 Ford Explorer 4,300 business miles (total miles overall = 12,000); use the standard mileage rate to calculate car and truck expenses. C. Home office: office used exclusively and on a regular basis; office space = 200 sq feet; total home = 1,600 sq feet Expenses for the whole house: Utilities $2,000; real estate taxes $4,200; insurance; 1,200; and interest $5,000. Basis of the home = $245,000. Value of the land = $75,000. Form 8829, Line 41 = 2.461%. What is the self employment Tax?
