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Business Taxation: Employee vs. Independent Contractor

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Distinguishing an employee from an independent contractor is very important for tax purposes. Why do you think this is the case?

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1. Distinguishing an employee from an independent contractor is very important for tax purposes. Why do you think this is the case?

Indeed, this distinction is important with respect to tax purposes, because the tax payments are based on how the income is earned (e.g., as an employee or independent contractor), which is handled differently for tax purposes. It has to do with whether laws governing the relationship between an employer and an employee apply or is the worker an independent contractor?

When laws governing the relationship between an employer and an employee ...

Solution Summary

Related to business taxation, this solution distinguishes between an employee from an independent contractor which is very important for tax purposes. It los looks at why this is the case.

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