The Social Security tax does not apply to which of the following?

Compensation paid in forms other than cash.

Self-employment income of $1,000.

Bonuses and vacation time pay.

Fact Pattern:

Sabrina is a cash-basis self-employed accountant. During 2020, she had the following income and expense items:

Gross receipts	$164,500
Operating expenses	31,000
Guaranteed payments from partnership for service to partnership	6,000
Share of income from general partnership that operates bakery	10,000
Net operating loss carryover	(6,000)
Share of S corporations ordinary income	7,000
Gain on sale of a computer used in the business	500

What is the amount of earnings on which Sabrina will have to pay the Medicare portion of the self-employment tax for 2020?

$149,500

$138,063

$137,700

$144,528

Medical and hospital reimbursements by the employer that are excluded from gross income.

Which one of the following statements about the self-employment tax is false for 2020?

Self-employed individuals may deduct one-half of their self-employment taxes for income tax purposes.

The maximum self-employment tax that can be owed by a self-employed individual is 15.3% times $137,700, or $21,068.

The old-age, survivors, and disability insurance (OASDI) portion of the self-employment tax has a $137,700 net earnings ceiling, while the hospital insurance (Medicare) portion of the self-employment tax has no ceiling.

In addition to deducting one-half of the self-employment taxes for income tax purposes, self-employment net income can be reduced by the product of the net income from self-employment times one-half of the self-employment tax rate.

Please answer each question