Since Roberta is self-employed, every dollar she earns is taxable income.
From the information provided, she earned
$45,000 + 2,500 + 500 + 1,500 = $49,500
Self-employment taxes are comprised of two parts: Social Security and Medicare. The Social Security tax rate is 12.4 percent, and the Medicare tax is 2.9 percent on all earnings, but a portion can be deducted from federal income taxes. The full calculation follows.
Adjusted earnings = $49,500
Less: self-employment adjustment = $3,787
Taxable self-employment earnings = $45,713
Self-employment tax = $5,668
Medicare tax = $1,326
Total self-employment tax = $6,994
Later, when the federal income taxes are prepared, there will be a
Tax-deductible portion of $3,497. That deduction does NOT reduce the Social Security/Medicare payment; it will only affect federal income taxes.
