Chapter 7- Independent Contractor or Employee

A broker must file an IRS Form 1099-MISC for an independent contractor who earns more than

$600

What is the suggested length of time for a contractor's agreement?

1 year

A broker must withhold federal income tax from

An employee's pay.

How often must an independent contractor agreement be renewed?

every 15 months

If a licensee joins a company as an independent contractor, which of these will he probably have to pay for on his own?

health insurance

When negotiating an independent contractor agreement, which question should NOT be asked?

how many hours am I required to work each week? (Independent contractors cannot be required to work certain hours or a certain number of hours each week)

these guidelines are part of the IRS safe harbor test

income must be based on sales, the contractor must be licensed as a real estate salesperson or broker, there must be a written contract in place

If an IRS audit determines a salesperson is an employee and not an independent contractor, which of the following will the employing broker NOT be liable for?

liability insurance

Which of the following is NOT required to be retained in relation to soliciting and granting mortgage loans to buyers of one-to-four-family dwellings?

purchase offer

Which of the following must a broker legally provide to an employee?

sales commission

Which of the following must a broker provide to an independent contractor?

supervision

The main difference between employees and independent contractors is

taxes

Who may legally compensate a licensed salesperson?

the employing broker

In an IRS audit, which of the following situations would cause the IRS to think that a contractor might really be an employee?

the licensee receives an hourly wage and The licensee takes paid sick days.

If a licensee joins a company as an independent contractor, which of these will he probably NOT have to pay for on his own?

utility expenses

Which of the following provisions would be included in an independent contractor employment agreement?

which expenses the broker will pay

Participation is defined to include active service for how many hours of per week?

35

Participation is defined to include active service for how many weeks in a year?

50

Which of these guidelines is not part of the IRS safe harbor test?

Contractors must have income tax withheld.

Which NY law regulates how long brokers must retain transaction records?

DOS Regulation 175.23

Which of these statements about an independent contractor is true?

He or she is paid commission on all sales.

What can a broker require of his independent contractors?

They must have a signed a written work agreement.

A broker must pay unemployment taxes, workers' compensation, and disability insurance for any employee earning

any amount per week