Sales associate Steve receives an hourly wage of $14 an hour from broker Clayton. Clayton tells the IRS Steve is an independent contactor. The IRS then says Steve has failed the and does not qualify as an independent contractor

Salary test

Explanation:

In this contexts, Salary test is a baseline that is created to determine whether an individual to held a certain status during tax calculation.

IRS tend to see a person as 'independent contractor' if it's being paid per projects. Receiving hourly rate tend to be considered as a salary and will most likely disqualify a person as an independent contractor.

There are a couple of exception for this criteria. Typically given to a job which value is calculated by how much time you've spent with customers. (such as lawyers, psychologist, etc)

But since Steve is at Sales, the amount of times he spent usually is a non-factor to his value. Only the amount of product he sold. This is why receiving hourly rate as a sales person will make him fail the salary test.

answer$225.00;