Utah General Contractors Business and Law Practice Exam 2026 - Free Practice Questions and Study Guide

Question: 1 / 400

At what amount must net earnings trigger self-employment taxes?

$200

$300

$400

Net earnings from self-employment must reach a minimum threshold before self-employment taxes become applicable. The correct amount that triggers self-employment taxes is $400. This means that if an individual's net earnings from self-employment are $400 or more for the tax year, they are required to pay self-employment taxes on that income. This threshold is significant because it establishes the minimum income level at which self-employed individuals must contribute to Social Security and Medicare, ensuring they have access to these benefits in the future.

Choosing an amount below $400 would not meet the criteria set by the IRS for triggering these taxes. Therefore, options suggesting lower amounts do not represent the correct threshold for self-employment tax liability.

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$500

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