Determine who pays individual income taxes, corporate income taxes, and payroll taxes.

Question

A. Companies pay corporate income and payroll taxes, and employees pay individual income and payroll taxes. Those who are self-employed may have to pay individual income, corporate income, and payroll taxes.
B. Companies pay individual income and payroll taxes, and employees pay payroll taxes. Those who are self-employed must pay payroll taxes.
C. Companies pay individual income, corporate income, and payroll taxes, and employees pay individual income and payroll taxes. Those who are self-employed only have to pay individual income taxes.
D. Companies pay corporate income taxes and employees pay individual income taxes. Those who are self-employed must pay individual income and payroll taxes.

Answer 1

The correct answer is:

D. Companies pay corporate income taxes and employees pay individual income taxes. Those who are self-employed must pay individual income and payroll taxes.

Here's a brief explanation:

• Individual Income Taxes: Generally paid by individuals (employees) based on their personal earnings.
• Corporate Income Taxes: Paid by corporations on their profits.
• Payroll Taxes: Typically paid by both employers and employees, with employers matching the contributions made by employees (e.g., Social Security and Medicare taxes).

Self-employed individuals generally need to pay both individual income taxes and payroll taxes (self-employment taxes).