June Is a 20% Owner-Employee in the Woodbourne Corporation, an S

question 4

Multiple Choice

June is a 20% owner-employee in the Woodbourne Corporation, an S corporation. She is not paid a salary and her share of the corporation's income is $57,000.
I.June must pay self-employment tax at the rate of 15.3% on her share of the S corporation's income.
II.June must pay Social Security at a rate of 7.65% on her share of the S corporation income.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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