Question

Please answer all the questions

1. Why is it important to distinguish between an employee versus an independent contractor from a tax perspective?

Group of answer choices

A. Misclassification is unimportant and there are no penalties.

B. It's has no impact - a decision must simply be made.

C. The choice must be decided on the first day the person starts to perform services for the employer so that the employee or independent contractor can estimate their tax bill.

D. Employers must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee

2. How are the taxes for an Independent Contractor different from those of an Employee?

Group of answer choices

A. Employees' self employment taxes are paid 50% by their employer, whereas Independent Contractors pay 75% of their own self employment taxes.

B. There is no difference is the taxes paid. The difference is purely in wage laws.

C. Employees' employment taxes are paid 50% by their employer, whereas Independent Contractors pay 100% of their own employment taxes.

D. Independent Contractors are subject to a surtax of 35%, where as employees are not.

3. Which best decribe the basic IRS description of the Home Office deductibility test?

Hint review IRS topic 509.

Group of answer choices

A. Regular & Private Business Use

B. Frequent & Partial Business Use

C. Regular & Exclusive Business Use

D. Recurring & Exclusive Business Use

4. What are the 3 general rules for qualifying your home office as a business expense?

Group of answer choices

A.

1. The secondary place of business for your trade or business
2. The place where you have your mail sent
3. Must be a separate structure

B.

1. The secondary place of business for your trade or business
2. The place where you have your mail sent
3. In connection with your trade or business, if you use a separate structure that is not attached to your home

C.

1. The secondary place of business for your trade or business
2. The place where you meet and deal with your patients, clients, or customers in the normal course of your trade or business; or
3. In connection with your trade or business, if you use a separate structure that is not attached to your home

D.

1. The principal place of business for your trade or business
2. The place where you meet and deal with your patients, clients, or customers in the normal course of your trade or business; or
3. In connection with your trade or business, if you use a separate structure that is not attached to your home

Answer 1

1. Why is it important to distinguish between an employee versus an independent contractor from a tax perspective?

Answer: D. Employers must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee

2. How are the taxes for an Independent Contractor different from those of an Employee?

Answer: C. Employees' employment taxes are paid 50% by their employer, whereas Independent Contractors pay 100% of their own employment taxes.

3. Which best decribe the basic IRS description of the Home Office deductibility test?

Answer:  C. Regular & Exclusive Business Use

4. What are the 3 general rules for qualifying your home office as a business expense?

Answer: C.

1. The secondary place of business for your trade or business
2. The place where you meet and deal with your patients, clients, or customers in the normal course of your trade or business; or
3. In connection with your trade or business, if you use a separate structure that is not attached to your home