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:

Coping Strategies

Methods or techniques used by individuals to deal with stressful situations or emotions.

Faith

Complete trust or confidence in someone or something, often associated with spiritual beliefs or religious conviction.

Stressful Situations

Circumstances or events that cause a state of strain or tension, requiring an individual to adapt or respond.

Psychoeducational Group

A form of group therapy focusing on educating individuals about their conditions and enhancing coping strategies.