Which of the Following Statements Regarding Independent Contractors and Employees

question 370

Multiple Choice

Which of the following statements regarding independent contractors and employees is true?

• A) Independent contractors pay Social Security and Medicare tax of 15.3%.
• B) Independent contractors and employees pay the same Social Security and Medicare tax rates.
• C) Employees must pay unemployment taxes.
• D) Independent contractors deduct their business expenses "from AGI."

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Definitions:

Stock Options

Stock options grant the holder the right, but not the obligation, to buy or sell a company's stock at a predetermined price before a specified date.

Articles Of Incorporation

Legal documents filed with a governmental body to legally document the creation of a corporation, outlining its management structure, purpose, and other fundamental details.

Double Taxation

A situation where the same income is taxed twice, typically once at the corporate level and again when distributed to shareholders as dividends.

Company Management

The group of individuals responsible for making major decisions, overseeing operations, and managing the resources and strategy of a company.