When an Employee/shareholder Receives an Income Allocation from an S

question 10

Multiple Choice

When an employee/shareholder receives an income allocation from an S corporation, what taxes apply to the income allocation?

• A) FICA and self-employment tax.
• B) Self-employment tax only.
• C) FICA tax only.
• D) None of the choices are correct. This income will never be taxed.
• E) None of the choices are correct. This income will, however, be subject to regular income tax.

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Definitions:

Absenteeism

The frequent absence from work or other duties without good reason, which can affect productivity and morale within organizations.

Turnover

The rate at which employees leave a company and are replaced by new employees.

Tardiness

The act of being late, particularly referring to late arrival at work or failure to meet deadlines.

Strikes

Work stoppages initiated by employees to pressurize employers into meeting their demands regarding wages, work conditions, or other workplace issues.