💰 CPA Exam Prep

Self-employment tax applies to:

A W-2 employees only
B Net self-employment income (covers Social Security and Medicare for self-employed)
C Retirement income
D Investment income

✓ Correct Answer: Option B

Self-employment tax is the SE equivalent of FICA, covering Social Security (12.4%) and Medicare (2.9%).

Related CPA Exam Prep Questions