Marcia is a shareholder in an S corporation and also works for the corporation. This year, her share of ordinary income was $250,000 and her compensation was $100,000. Which of the following accurately describes her tax consequences from these earnings?

Multiple Choice

A) The ordinary income is subject to income and self-employment tax; the compensation is subject to income and payroll tax.

B) Both the ordinary income and the compensation are subject to income tax and self-employment tax.

C) Both the ordinary income and the compensation are subject to income tax and the compensation is subject to self-employment tax.

D) Both the ordinary income and the compensation are subject to income tax and the compensation is subject to payroll tax.