Question

Compared to wage income, self-employment income: Group of answer choices d. is subject to SECA taxes...

Compared to wage income, self-employment income:

Group of answer choices

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

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

c. offers no deductions for SECA tax paid.

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

The Medicare Surtax is: Group of answer choices

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

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

d. a 0.9% surtax that is added on self-employment income that exceeds certain thresholds.

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

Which of the following statements concerning a grantor trust is/are true?

(1) grantor trusts can reduce the cost, delay, and publicity of probate

(2) income from a grantor trust is taxed to the grantor

(3) grantor trusts avoid estate tax

(4) grantor trusts incur gift tax

Which of the following statements about a simple trust is true?

b. it permits distribution of corpus

a. it permits charitable contributions

c. the trustee has discretion whether to accumulate or distribute trust income

d. it distributes all trust income annually

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Homework Answers

Answer #1

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

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

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

2.The Medicare Surtax is:

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

Answer-d. a 0.9% surtax that is added on self-employment income that exceeds certain thresholds.

3.Which of the following statements concerning a grantor trust is/are true?

Answer-(2) income from a grantor trust is taxed to the grantor

4.Which of the following statements about a simple trust is true?

Answer -d. it distributes all trust income annually

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