Liberty Tax School Practice Test 2026 - The All-in-One Guide to Mastering Your Exam Success!

Wage earners do not deduct Social Security taxes on their tax returns, as these taxes are not considered deductible expenses. Their employers calculate the amount of Social Security taxes owed based on the employee's earnings, applying the appropriate tax rates. This means that for wage earners, the employer plays a key role in determining and withholding the correct amount.

Regarding tax rates, wage earners typically pay similar rates for Social Security taxes as self-employed individuals but don’t face the same total burden, as self-employed individuals are responsible for both the employee and employer portions of the tax. Finally, all wage earners are required to pay Medicare taxes; there are no exemptions for this, as it is a standard part of payroll taxes. Therefore, the statement regarding employers calculating Social Security taxes is accurate and reflects the standard payroll tax procedures.