Which of the following statements about statutory employees is incorrect? A) Statutory employees report their wages, income, and allowable expenses on Schedule C, Form 1040. B) Sta... Which of the following statements about statutory employees is incorrect? A) Statutory employees report their wages, income, and allowable expenses on Schedule C, Form 1040. B) Statutory employees are independent contractors who are treated as employees for employment tax purposes. C) The most common type of statutory employee is a driver who distributes beverages, meat, fruit, vegetables, or bakery products. D) Statutory employees are liable for self-employment tax because their employers must treat them as employees for Social Security tax purposes. Read more

Understand the Problem

The question is asking to identify the incorrect statement among the given options regarding statutory employees. It involves understanding the definitions and tax implications associated with statutory employees.

More Information

Statutory employees do not pay self-employment tax as they have FICA taxes withheld by the employer. They are treated as employees for employment tax purposes, allowing them to have Social Security and Medicare taxes withheld but not paying self-employment taxes.

Tips

A common mistake is confusing self-employment tax liability for statutory employees. Remember, they pay FICA taxes through their employer, not through self-employment tax.

Sources

• Statutory employee - Wikipedia - en.wikipedia.org
• Statutory employees | Internal Revenue Service - irs.gov