Jeffrey works as an independent contractor for an accounting firm jointly owned and managed by the Matthews brothers.Which of the following implications can be drawn from the scenario?

Question

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Jeffrey will be responsible for making payments for his Social Security (FICA), federal income tax, state taxes, and Medicare. An employer who maintains employees has the responsibility to pay Social Security (FICA), the FICA excise tax, Railroad Retirement Tax Act (RRTA) withholding amounts, federal unemployment compensation (FUTA), IRS federal income tax withholdings, Medicare, and state taxes. In addition, it is the employer's responsibility to withhold a certain percentage of the employee's wages for federal income tax purposes. On the other hand, an independent contractor has to pay all of these taxes on his or her own.

Jeffrey Works as an Independent Contractor for an Accounting Firm