Tax Preparation Self-Employment and Business Taxes

Question 1

Self-employment tax is composed of which two components?

Accepted Answer

Social Security tax and Medicare tax

Answer

Federal income tax and state income tax

Answer

FUTA and SUTA

Answer

Corporate tax and excise tax

Question 2

A self-employed taxpayer may deduct what portion of their self-employment tax from gross income?

Accepted Answer

50%

Answer

None

Answer

25%

Answer

100%

Question 3

A home office deduction for self-employed individuals requires the office space to be used:

Accepted Answer

Exclusively and regularly for business

Answer

Primarily for business

Answer

Occasionally for business

Answer

For any work-related activity

Question 4

Schedule C net profit of $40,000 is subject to self-employment tax on what amount?

Accepted Answer

$36,940

Answer

$40,000

Answer

$38,000

Answer

$37,000

Question 5

A sole proprietor can deduct contributions to a SEP-IRA up to what percentage of net self-employment earnings?

Accepted Answer

25%

Answer

10%

Answer

15%

Answer

50%

Question 6

A freelancer's Schedule C shows $15,000 net profit. What is their self-employment tax (rounded)?

Accepted Answer

$2,120

Answer

$1,147

Answer

$2,295

Answer

$3,060