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:

Education

The systematic process of facilitating learning, or the acquisition of knowledge, skills, values, and habits through various methods such as teaching, training, research, and discussion.

Production Techniques

Methods and processes used in the transformation of inputs into outputs or goods and services.

New Approaches

Innovative or alternative methods and strategies introduced to address issues or improve existing processes.

Standard of Living

The measure of affluence, convenience, tangible assets, and basic needs present for a particular economic group or location.