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What's a statutory employee?

by TurboTax7 Updated 3 weeks ago

Statutory employees are created by statute for employment tax purposes. Statutory employees fit into one of the following conditions:

  • A driver who distributes beverages (other than milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is a contractor, or is paid on commission.
  • A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company.
  • An individual who works at home on materials or goods that are supplied and that must be returned to the vendor, if the vendor has also furnished specifications for the work to be done.
  • A full-time traveling or city salesperson who works on behalf of another person and turns in orders to that person from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer's business operation. The work performed must be the salesperson's principal business activity.

As a statutory employee, you can deduct ordinary and necessary business expenses directly related to your statutory employment. We'll help you claim these business expenses on Schedule C.