1.With regards 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.For the current tax year, Ron has $10,000 in income from selling produce from his farm, a $5,000 loss from a small engine repair business, and $50,000 in profits from a landscaping business.How much will Ron's gross income be for the year?

a.$60,000

b.$55,000

c.$50,000

d.$10,000

6.To be eligible for social security retirement benefits, an individual must have a minimum of 40 quarters of coverage.(True/False).

7.An Individual is entitled to retirement benefits if he/she is fully insured and at least 65 years of age.(True/False).

8.Social Security uses the individual's Annual Earnings for his/her last three years to calculate his/her monthly benefit. (True/False).

9.Workers who continue to work past the age of 65 may receive an increase in benefits for all the years they work until they elect to retire. (True/False).

10.If an individual is under normal retirement age and keeps working, he/she may lose all of part of their Social Security retirement benefits for the year. (True/False).