Question

Rita and Paul are married and both work outside the home. Paul works as a contractor, and Rita is employed by a company. Paul tells Rita not to worry about taxes for his income from contracting, since the government will withhold the appropriate amount from Rita's paycheck. Is Paul correct in this thinking? Why?
Select the best answer from the choices provided.

A. Paul is correct because the government always withholds money for taxes due from all incomes.
B. Paul is incorrect because he has to pay taxes for contract work as the year progresses.
C. Paul is correct because the government automatically withholds taxes from the spouses of contractors.
D. Paul is incorrect because he and Rita are married and will file jointly.

Answer 1

Your answer is A. Paul is correct because the government always withholds money for taxes due from all incomes.