Statutory employees can claim their business expenses directly against their income as deductions for adjusted gross income (AGI), rather than as miscellaneous itemized deductions. This is a specific tax treatment that distinguishes them from regular employees, who typically cannot deduct unreimbursed business expenses in this manner.

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Statutory Employees

Question 77

Multiple Choice

Statutory employees:

A) Report their expenses as miscellaneous itemized deductions.
B) Include common law employees.
C) Are subject to income tax withholdings.
D) Claim their expenses as deductions for AGI.
E) None of these.

Correct Answer: