One of the tax advantages of being self-employed (rather than being an employee) is:
A)The self-employment tax is lower than the Social Security tax.
B)The cutback adjustment does not apply.
C)Job-related expenses are deductions for AGI.
D)The actual cost method for deducting the business use of an automobile can be selected.
E)A deduction for an office in the home is available.

Question

Quizplus · Accepted Answer

As a self-employed individual, job-related expenses such as office supplies, professional development, and marketing costs are tax deductible as business expenses for AGI. Unlike employees, these expenses are not subject to the 2% AGI threshold before they can be deducted. This deduction can significantly reduce the total taxable income and, hence, can lower the self-employment tax liability.

One of the Tax Advantages of Being Self-Employed (Rather Than