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:

Repolarization

The process by which cells, especially heart and nerve cells, restore their membrane potential to a resting state after depolarization.

Electrocardiogram

A diagnostic test that measures the electrical activity of the heart to assess its health and functionality.

Electrodes

Conductive materials that allow the flow of electrical current into or out of a medium, used in various electronic devices and medical applications.

Amplifier

An electronic device that increases the power, voltage, or current of a signal.