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Business, 09.03.2020 22:51 Leffew

Greg Company agreed to pay Ms. Bilko $45,000 compensation for services performed for the company. Greg Company is allowed a $45,000 deduction for the compensation paid either as a salary or as a fee to an independent contractor. Ms. Bilko will recognize $45,000 ordinary earned income in either case. Then, the Gregg Company must withhold federal and state income tax for Ms. Bilko, whether she is an employee or an independent contractor.
(a) Compare the income tax consequences to Greg and Ms. Bilko if she is an employee or if she is an independent contractor.
(b) Compare the payroll tax consequences to Greg and Ms. Bilko if she is an employee or if she is an independent contractor.
(c) Compare the income tax payment requirements to Ms. Bilko if she is an employee or if she is an independent contractor.

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