1.With regard to wage income:

a.employers pay all of the social security income directly, and employees pay the Medicare tax through withholding.

b.employers pay half of the payroll taxes (7.65%) directly, while employees pay the other half through withholding.

c.payroll taxes are only withheld if the employee specifically requests additional withholding.

d.employees rarely see any reporting of their payroll taxes because they are sent directly from the employer's account to the IRS.

2.Self-employed taxpayers are obligated to pay the SECA tax, which:

a.is capped at the same inflation adjusted amount as FICA taxes on wage income.

b.varies by state.

c.must be reported on Schedule C.

d.is only imposed on income for which the self-employed taxpayer receives a form 1099.

3.Compared to wage income, self-employment income:

a.is always subject to higher social security and Medicare taxes.

b.has a lower cap on social security and Medicare taxes.

c.offers no deductions for SECA tax paid.

d.is subject to SECA taxes which must be paid entirely by the taxpayer

4.When determining whether a shareholder of an S corporation who is also an employee has received "reasonable compensation" for the services provided to the corporation, the IRS will consider which factors:

a.The age of the shareholder/employee.

b.How long the corporation has been in existence.

c.The total number of employees of the corporation.

d.What comparable businesses pay for similar services.

e.All of the above.

5.The Medicare Surtax is:

a.a 0.9% surtax on investment income above certain thresholds.

b.a 3.8% surtax that is added to the FICA wages and/or self-employment income that exceeds certain thresholds.

c.a 0.9% surtax that is added to the FICA wages and/or self-employment income that exceeds certain thresholds.

d.A 0.9% surtax on FICA wages that is to be collected by employers through increased withholding.

6.The Net Investment Income Tax applies to income that:

e.meets the definition of "investment income."

f.exceeds certain thresholds.

g.is not considered wages or self-employment income.

h.is not subject to the Medicare surtax.

i.all of the above.

These are multiple choice