The status of an individual performing work is very important and determines what tax form and how payments are recorded.Which of the following is TRUE?

Question

Quizplus · Accepted Answer

An employee receives a paycheck and a form W-2, while a contractor receives a vendor payment and a form 1099-MISC. This is because an employee is considered an official staff member of a company, while a contractor is considered an independent entity that provides services to the company. Therefore, their tax forms and payment recording differ.

The Status of an Individual Performing Work Is Very Important