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If a Business Retains Someone to Provide Services, That Person

question 86

Essay

If a business retains someone to provide services, that person may either be an employee or be self-employed (i.e., independent contractor).
a. What are the tax advantages to the business of having the service provider classified as self-employed?
b. What are the advantages and disadvantages to the service provider of self-employed status?


Definitions:

Unexpected Price Changes

Variations in the price of securities that occur without prior warning, often due to unforeseen events.

Contract

A legally binding agreement between two or more parties that is enforceable by law.

Payoff Profile

A graphical representation that shows the potential profit or loss of an investment option at various prices at expiration.

Gains And Losses

The financial results from the sale of assets or investments, where gains represent increased value and losses represent decreased value.

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