Lindsay's estimated tax payment for the first quarter. She is self-employed and she expects to earn $78,080 this year. Her estimated income tax rate is 24%. For self-employed persons, social security tax is 12.4% of wages up to $106,800, and Medicare tax is 2.9% of all wages.
To calculate Lindsay's estimated tax payment for the first quarter, we need to determine her taxable income and then calculate the income tax, social security tax, and Medicare tax.
1. Taxable income: To calculate Lindsay's taxable income, we need to subtract any deductions or adjustments from her total income. Since we do not have information about Lindsay's deductions or adjustments, we will assume that her $78,080 income is her taxable income.
2. Income tax: To calculate Lindsay's income tax, we need to multiply her taxable income by her estimated income tax rate.
Income tax = Taxable income x Income tax rate
Income tax = $78,080 x 0.24
Income tax = $18,739.20
Lindsay's estimated income tax payment for the first quarter is $18,739.20.
3. Social security tax: For self-employed individuals, the social security tax is 12.4% of wages up to $106,800. Since Lindsay's income is $78,080, the social security tax will be calculated as follows:
Social security tax = Wages x Social security tax rate
Social security tax = $78,080 x 12.4%
Social security tax = $9,669.12
Lindsay's estimated social security tax payment for the first quarter is $9,669.12.
4. Medicare tax: The Medicare tax for self-employed individuals is 2.9% of all wages. So, the Medicare tax for Lindsay can be calculated as follows:
Medicare tax = Wages x Medicare tax rate
Medicare tax = $78,080 x 2.9%
Medicare tax = $2,264.32
Lindsay's estimated Medicare tax payment for the first quarter is $2,264.32.
In summary, Lindsay's estimated tax payment for the first quarter would be the sum of her income tax, social security tax, and Medicare tax:
Estimated tax payment = Income tax + Social security tax + Medicare tax
Estimated tax payment = $18,739.20 + $9,669.12 + $2,264.32
Estimated tax payment = $30,672.64