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

question 88

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:

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time.

Sexual Behaviors

Actions related to seeking pleasure or procreation, including intercourse, masturbation, and other practices.

Attitudes

Mental inclinations shown through assessing a specific entity with a certain level of liking or disliking.

Desires

Strong feelings of wanting or wishing for something to happen.