15 Which of the following is correct regarding selfemploymen

15. Which of the following is correct regarding self-employment taxes?
I. For purposes of the portion of self-employment tax that is equivalent to Social Security tax,
taxable self-employment income is limited to a prescribed maximum amount reduced by other
wages earned by the taxpayer that are subject to FICA and Medicare taxes.
II. For purposes of the portion of self-employment tax that is equivalent to the Medicare tax,
taxable self-employment income is limited to a prescribed maximum amount reduced by other
wages earned by the taxpayer that are subject to FICA and Medicare taxes.
I only
II only
Neither I or II
I and II

Solution

For purposes of the portion of self-employment tax that is equivalent to Social Security tax, taxable self-employment income is limited to a prescribed maximum amount reduced by other wages earned by the taxpayer that are subject to FICA and Medicare taxes. Option 1 is correct