Question

What are the different types of individuals mentioned in the given content?

1) Employee
2) IC
3) Gratuitous
4) Trustee
5) Subagent

Answer 1

In the given content, there are several types of individuals mentioned:
1) Employee - refers to someone who works for an employer and receives wages or salary in exchange for their services.
2) IC - stands for Independent Contractor, which is a self-employed individual who provides services to a client or company under a contract.
3) Gratuitous - refers to someone who does something out of kindness or generosity, without expecting anything in return.
4) Trustee - is a person or entity that holds and manages property or assets on behalf of others, known as beneficiaries.
5) Subagent - is an individual or entity appointed by an agent to assist in carrying out the agent's duties and responsibilities.

Answer 2

An individual owning a sole-employee corporation will pay personal income tax, employer payroll taxes for Social Security and Medicare, and potentially corporate taxes. Self-employed individuals pay income and self-employment taxes. Social Security tax is regressive due to the income cap.

Step-by-step explanation:

If an individual owns a corporation and is the sole employee, they will have to pay multiple types of federal tax. These include income tax on their personal earnings, the employer portion of Social Security and Medicare taxes (often referred to as FICA taxes), and unemployment taxes. Additionally, corporate taxes may apply if the corporation itself generates profit. In contrast, self-employed individuals not operating through a corporation would need to pay income tax and self-employment tax, which covers their contributions to Social Security and Medicare. Concerning the nature of the social security tax, it is regressive, as it applies a flat rate up to an income cap, meaning that higher income beyond this cap isn't taxed, relatively reducing the tax burden on high earners.