Veronica mows lawns during the summer. In 2020 she was paid directly by homeowners for her work, in some case on the basis of the completed job, in other cases at an hourly rate. Her friend Jonathon does the same work. However, he is paid at an hourly rate by a lawn maintenance company. Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Veronica earns business income because she is being paid directly by homeowners for the completed job, which constitutes a business arrangement. Jonathon earns employment income because he is being paid by a lawn maintenance company for his hourly work, making him an employee. Veronica is also able to deduct more expenses than Jonathon because she is a self-employed individual, and can deduct expenses like equipment, supplies, and vehicle expenses as business expenses. Jonathon, on the other hand, may only be able to deduct certain expenses if they are necessary for him to carry out his job duties, such as uniform costs or required certifications.

Veronica Mows Lawns During the Summer