The distinction between independent and dependent agents is important because tax and labor law considerations are determined by the designated relationships.

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Tax and labor laws have different rules depending on whether a worker is classified as an independent contractor or a dependent agent (employee). For example, independent contractors are responsible for their own taxes and benefits while dependent agents have these things handled by their employers. Therefore, understanding the distinction between the two is important for legal and financial purposes.

The Distinction Between Independent and Dependent Agents Is Important Because