Juan recently started operating a flower shop as a sole proprietorship. In its first year...
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Accounting
Juan recently started operating a flower shop as a sole proprietorship. In its first year of operations, the shop had taxable income of $60,000. Assuming that Juan had no other employment related earnings, which of the following is correct?
| a. | The flower shop must withhold employment taxes from Juans earnings. | |
| b. | Juan must pay self-employment tax on the earnings from the business. | |
| c. | Juan will be exempt from the self-employment taxes for the fist three years of operations. | |
| d. | Juan will be exempt from the Medicare tax because the business earnings are below the threshold amount. |
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