question archive Victor’s gross farm income is $540, and his net farm profit is $460
Victor’s gross farm income is $540, and his net farm profit is $460
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Victor’s gross farm income is $540, and his net farm profit is $460. Consequently, his net earnings figured under the farm optional method are $360 (2/3 of $540) and his actual net earnings are $425 (92.35% of $460). Victor owes what amount of Self-Employment (SE) tax if he uses the farm optional method to determine the tax?
A. $0 B. $360 C. $425 D. $540
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The correct answer is $0
Under farm optional method , if farm income subject to self employment taxes is less than $400, then there would no self employement tax is owed.
Here earnings figured under fam optional method is $360 , less than $400 , so No self employement tax.
