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

A. Avoids the cutback adjustment as to business meals.

B. All of the self-employment tax is deductible for income tax purposes.

C. Work-related expenses are not subject to the 2%-of-AGI floor.

D. A Schedule C does not have to be filed.

E. None of the above

Question

Business

Alonso Valentine

18 August, 03:12

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

A. Avoids the cutback adjustment as to business meals.

B. All of the self-employment tax is deductible for income tax purposes.

C. Work-related expenses are not subject to the 2%-of-AGI floor.

D. A Schedule C does not have to be filed.

E. None of the above

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Answers (1)

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Naomi Howe · Answer 1

C) Work-related expenses are not subject to the 2%-of-AGI floor.

Explanation:

The 2%-of-AGI floor refers to an IRS rule by which employees can deduct itemized deductions that exceed 2% of their adjusted gross income. For example, your AGI = $70,000, then you can only itemize deductions that exceed $1,400.

On the other hand independent contractors are not subject to this rule.