Question: Question 7 Adam Fleeman, a skilled carpenter, started a home improvement business with Tom Collins, a master plumber. Adam and Tom are concerned about the

Question 7

Adam Fleeman, a skilled carpenter, started a home improvement business with Tom Collins, a master plumber. Adam and Tom are concerned about the payroll taxes they will have to pay. Assume they form an S corporation, and each earns a salary of $85,000 from the corporation; in addition, they expect their share of business profits to be $60,000 each. How much combined Social Security tax and Medicare tax (Employee Rate=7.65%; Employer Rate=7.65%) will Adam and the corporation have to pay on his salary and profits?

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