For Taxpayers Who Receive Both Salary as an Employee and Self-Employment

question 157

Multiple Choice

For taxpayers who receive both salary as an employee and self-employment income as an independent contractor in the same year, which of the following statements regarding FICA and self-employment taxes is most accurate?

• A)The Social Security limit applies to the salary but not to the self-employment income.
• B)The Social Security limit applies to the self-employment income but not to the salary.
• C)Salary is first applied against the Social Security limit and then self-employment income is applied against the Social Security limit.
• D)Self-employment income is first applied against the Social Security limit and then salary is applied against the Social Security limit.

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Definitions:

Fructus Industrials

Crops that are planted and harvested by human labor, such as wheat or corn.

Trade Fixture

Personal property that a tenant installs on leased premises for business purposes, which can be removed at the lease's termination.

Constructive Eviction

An eviction that occurs by the act of the landlord depriving the tenant of something of a substantial nature that was called for under the lease.