All of the Following Statements Regarding Self-Employment Income/tax Are True

question 92

Multiple Choice

All of the following statements regarding self-employment income/tax are true except:

• A)The self-employment tax is imposed on net earnings from self-employment when self-employment income is over $400.
• B)Self-employment tax is computed separately for married individuals filing joint returns.
• C)Independent contractors are subject to self-employment tax on the amount of net earnings from the self-employment activity.
• D)Employees who have a business in addition to their regular employment are not subject to the self-employment tax since FICA is withheld on their wages.

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Definitions:

Selling and Administrative Cost

Expenses related to the selling of products and the general administration of a business, not including production costs.

Activity Rate

A measurement used in activity-based costing to allocate costs to specific activities, typically expressed as a cost per activity unit.

General Overhead

General overhead encompasses all indirect costs involved in running a business that are not directly tied to a specific product or service, such as utility expenses and salaries of administrative staff.

Unit Selling Price

The amount of money charged to the customer for a single unit of a product or service.