Overview
Taxpayer A is an accounting major who works during the day for a local business and takes courses in the evening. They work 25 hours a week. Upon receiving their paycheck, Taxpayer A realizes that the employer is not withholding any income tax or FICA tax, treating them as an independent contractor.
Discuss the following points:
- What are the key differences between an employee and an independent contractor?
- Which classification (employee vs. independent contractor) is generally less costly for the employer, and why?
- Do you believe employers intentionally misclassify employees as independent contractors?
- If so, does this practice violate tax laws and/or ethical standards? Explain your reasoning.