Response to the following :
Self-Employment Tax:
Theodore Williams (SSN 327-59-8119) reports $130,000 of net profit on Schedule C. Complete Theodore's 2014 Schedule SE if his salary subject to social security taxes for the year was $74,500.
Retirement Plans:
a. Assume that Liz Bell (SSN 304-16-1059) had $14,000 of net profit from self-employment in 2014 and wants to make the maximum contribution to a SEP. Prepare Schedule SE to determine the amount of self-employment tax that Liz owes on her self-employment profits.
b. What is the maximum Liz can contribute to a SEP plan that would be fully deducted from gross income on her 2014 income tax return? Where on the tax return is the deduction claimed?