The Status of an Individual Performing Work Is Very Important

question 15

Multiple Choice

The status of an individual performing work is very important and determines what tax form and how payments are recorded.Which of the following is TRUE?

• A)An employee receives a paycheck and a form W-2; a contractor receives a vendor payment and also a form W-2.
• B)An employee receives a paycheck and a form W-2; a contractor receives a vendor payment and a form 1099-MISC.
• C)An employee receives a paycheck and a form W-2; a contractor receives a vendor payment and files an owner tax return.
• D)An employee receives a paycheck and a form W-2; an owner receives a dividend or distribution payment and a form 1099-MISC.

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Definitions:

Scooters

Lightweight personal vehicles with a step-through frame and a platform for the rider's feet, used for transportation.

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The capacity of an entity to generate a product or service with a lesser opportunity cost compared to others.

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A sovereign country located in Western Asia, occupying the small Qatar Peninsula on the northeastern coast of the Arabian Peninsula.

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A landlocked country located in Southern Africa, known for its stable democracy, natural beauty, and rich diamond mines.