Self-employment taxes: a. Are calculated based on unearned income such as interest and dividends as well as net earnings from self-employment. b. Are not affected by wages the taxpayer earns as an employee. c. Consist of Medicare tax and Social Security tax. d. Apply to taxpayers with less than $400 in self-employment earnings.

Question

Business

Pugh

13 March, 00:31

Self-employment taxes: a. Are calculated based on unearned income such as interest and dividends as well as net earnings from self-employment. b. Are not affected by wages the taxpayer earns as an employee. c. Consist of Medicare tax and Social Security tax. d. Apply to taxpayers with less than $400 in self-employment earnings.

+1

Answers (1)

Know the Answer?

Augustus Mclean · Answer 1

C. Consist of Medicare tax and Social Security tax.

Explanation:

Self-employment tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners.

You figure self-employment tax (SE tax) yourself using Schedule SE (Form 1040 or 1040-SR). Social Security and Medicare taxes of most wage earners are figured by their employers. Also you can deduct the employer-equivalent portion of your SE tax in figuring your adjusted gross income. Wage earners cannot deduct Social Security and Medicare taxes.