For taxpayers who receive both salary as an employee and self-employment income as an independent contractor in the same year, which of the following statements regarding FICA and self-employment taxes is most accurate?

Question

Quizplus · Accepted Answer

Salary is applied against the limit first. This is taxpayer favorable because the self-employment income is taxed at a higher rate and not as much of the income will be subject to the Social Security tax than would have been if self-employment income was applied first.

For Taxpayers Who Receive Both Salary as an Employee and Self-Employment