Question

A worker may prefer to be treated as an independent contractor (rather than an employee) for which of the following reasons:____________

a. Work-related expenses of an independent contractor are deductible for AGI.
b. All of the self-employment tax is deductible for income tax purposes.
c. A Schedule C does not have to be filed.
d. Avoids the overall limitation (50%) as to business meals.
e. None of these choices are correct.

Answer 1

Answer: a. Work-related expenses of an independent contractor are deductible for AGI.

Step-by-step explanation:

Independent Contractors are allowed to deduct the expenses they incur while contracting, from the AGI (Annual Gross Income).

This therefore reduces the taxes that the contractors have to pay unlike with employees who will have to pay income tax and cannot deduct much from work.