7
QuizMultiple Choice

Employment, Entrepreneurship, and Compensation

Question 7 • FL-2102373-Personal Finance and Money Management Honors

Which of the following is true regarding entrepreneurs and taxation?

Answer
A
Taxes are automatically deducted from their paycheck.
B
They are exempt from paying Social Security taxes.
C
They must calculate and pay their own income taxes.
D
They receive a pension instead of paying taxes.

Explanation

Entrepreneurs generally do not have an employer automatically withholding income taxes from a paycheck. They must keep track of their income, calculate the taxes they owe, and pay them—often through estimated tax payments during the year. They may also owe Social Security and Medicare taxes, so they are not exempt from those taxes.

AI-written and checked against the verified answer.

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