For taxpayers who receive both salary as an employee and self-employment income as an independent contractor in the same year, which of the following statements regarding FICA and self-employment taxes is most accurate?
A. The Social Security limit applies to the salary but not to the self-employment income.
B. The Social Security limit applies to the self-employment income but not to the salary.
C. Salary is first applied against the Social Security limit and then self-employment income is applied against the Social Security limit.
D. Self-employment income is first applied against the Social Security limit and then salary is applied against the Social Security limit.
Answer: C. Salary is first applied against the Social Security limit and then self-employment income is applied against the Social Security limit.