Question

47. Which of the following statements regarding Social Security are CORRECT? 1. Self-employed individuals may deduct the 100% payroll tax paid on their net Schedule C income as an above-the-line deduction from adjusted gross income. 2. Medicare taxes are 2.9% of an employee's compensation (paid half by the employer and half by the employee) with no ceiling (not including the Additional Medicare Tax). 3. Workers who are not covered by Social Security and do not pay into the system may still qualify for coverage under Medicare. 4. All taxpayers reach full retirement age (FRA) at age 65. A. 2 and 3 B. 1 and 2 C. 3 and 4 D. 1 and 4

Answer 1

Answer

The correct option based on the above provided information in this case is B. Both option 1 and 2 are correct where the self employed person get deduction on the payroll tax. Apart from that the burden of medicare taxes are taken into consideration by both the employer and employee.