The video tutorial explains the obligations of self-employed individuals under the Self-employed Contribution Act (SECA). It highlights the requirement for self-employed business owners to pay both the employee and employer portions of payroll taxes, which fund Medicare and Social Security. The tutorial details the current tax rate of 15.3% on profits, with 2.9% for Medicare and 12.4% for Social Security. Unlike employees of other businesses, self-employed individuals must cover the full tax amount themselves.

What is the main purpose of the Self-employed Contribution Act?

• To exempt self-employed individuals from paying taxes

• To ensure self-employed individuals pay both employee and employer payroll taxes

• To provide tax credits to self-employed individuals

• To reduce the tax rate for self-employed individuals

How much of the payroll tax rate is allocated to Social Security for self-employed individuals?

• 2.9%

• 12.4%

• 7.6%

• 15.3%

What is the total payroll tax rate that self-employed individuals must pay?

• 7.6%

• 10.2%

• 20.5%

• 15.3%

In a traditional employment setting, who shares the responsibility of paying payroll taxes?

• Both the employee and the employer

• Neither the employee nor the employer

• Only the employer

• Only the employee

If a self-employed individual earns $100,000, how much will they pay in payroll taxes?

• $20,000

• $15,300

• $12,400

• $7,600