20. LO2 Gosney Corporation has 2 employees. During the current year, Clinton earns
$64,000 and Trahn earns $120,000. How much Social Security tax does Gosney have to pay on the salaries earned by Clinton and Trahn?
21. LO2 Eric is a self-employed financial consultant. During the current year, Eric’s net self-employment income is $115,000. What is Eric’s self-employment tax?
22. LO2 Darrell is an employee of Whitney’s. During the current year, Darrell’s salary is
$112,000. Whitney’s net self-employment income is also $112,000. Calculate the Social Security and self-employment taxes paid by Darrell and Whitney. Write a letter to Whitney in which you state how much she will have to pay in Social Security and self-employment taxes and why she owes those amounts.
23. LO4 Classify the following items as ordinary income, a gain, or an exclusion:
a. The gross revenues of $160,000 and deductible expenses of $65,000 of an individ- ual’s consulting business
b. Interest received on a checking account
c. Sale for $8,000 of Kummel Corporation stock that cost $3,000
d. Receipt of $1,000 as a graduation present from grandfather
e. Royalty income from an interest in a gold mine
<em>No answers yet</em>