Question

Arnold is a lawyer who maintains an office for which he pays the rent. One single client accounts for 95% of his billings. He does routine legal work and income tax returns for this client as requested. The client pays Arnold a monthly retainer and occasionally additional amounts for extra work. Is Arnold is a self-employed individual or an employee?

Answer 1

Based on the information provided, Arnold is most likely a self-employed individual as he maintains his own office, has one major client, and is responsible for his own business operations.

Step-by-step explanation:

Based on the information provided, Arnold is most likely a self-employed individual.

Here are some reasons why:

• He maintains his own office and pays the rent for it.
• He has one single client who accounts for 95% of his billings.
• The client pays him a monthly retainer and occasional additional amounts for extra work.

These factors suggest that Arnold has control over his work and is responsible for his own business operations. As a self-employed individual, Arnold would be responsible for filing his own taxes, including corporate income tax on his profits, individual income tax on his salary, and payroll taxes taken out of the wages he pays himself.