30.03.2023 - 08:10

Which of the following could be a statutory employee? a) a licensed real estate agent. b) a direct seller. c) a life insurance sales agent who deals primarily with one carrier. d) an independent contractor.

Question:

Which of the following could be a statutory employee?

a) a licensed real estate agent.

b) a direct seller.

c) a life insurance sales agent who deals primarily with one carrier.

d) an independent contractor.

Answers (1)
  • igorken
    April 7, 2023 в 04:12

    Of the options given, the licensed real estate agent and the direct seller could potentially be considered statutory employees.

    A statutory employee is an individual who is treated as an employee for tax purposes, even though they are not technically employees under the common law rules. This classification can have certain tax implications for both the employer and the employee.

    According to the Internal Revenue Service (IRS), licensed real estate agents and direct sellers may be considered statutory employees if certain conditions are met. Specifically, a licensed real estate agent is considered a statutory employee if:

    • substantially all payments for their services are directly related to sales or other output (rather than the number of hours worked), and
    • their services are performed under a written contract stating that they will not be treated as an employee for federal tax purposes.

    Similarly, a direct seller is considered a statutory employee if:

    • substantially all payments for their services are directly related to sales or other output (rather than the number of hours worked), and
    • their services are performed pursuant to a written contract that states they are not employees for federal tax purposes.

    On the other hand, a life insurance sales agent who deals primarily with one carrier and an independent contractor would typically not be considered statutory employees under the IRS rules. The former is generally treated as an independent contractor for tax purposes, while the latter is typically responsible for paying their own self-employment taxes.

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