1. Chapter 2 Part II Independent Contractor1 New York Real Estate for Salespersons, 5th e By Marcia Darvin Spada Cengage Learning © 2013 All rights reserved.

2. Chapter 2 Part II Independent Contractor2 Chapter 2 Part II Independent Contractor © 2013 All rights reserved.

3. Chapter 2 Part II Key Terms Employee Independent Contractor Chapter 2 Part II Independent Contractor3 © 2013 All rights reserved.

4. Chapter 2 Part II Independent Contractor4 Comparison of Employee and Independent Contractor EmployeeIndependent Contractor Receives a salaryNo minimum salary Broker withholds social security, income and unemployment tax Salesperson pays taxes Broker can pay for extrasSets own hours Pays for most expenses- receives no extra compensation Enters into contract with broker © 2013 All rights reserved.

5. Chapter 2 Part II Independent Contractor5 Independent Contractor Rules If an independent contractor earns over $600, then the broker and contractor must file a Form 1099 misc. with the IRS Internal Revenue Code Section 3508 (b) (c) to comply with independent contractor status, real estate agents must have a written contract with the broker and be licensed © 2013 All rights reserved.

6. Chapter 2 Part II Independent Contractor6 Broker Compliance File yearly tax returns Prepare and file 1099s Broker supervision Maintain records at least 3 yrs © 2013 All rights reserved.