Utah Contractor Practice Exam

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Prepare for the Utah Contractor Exam with comprehensive quizzes and study resources. Gain confidence by accessing multiple-choice questions designed to enhance your knowledge and skills for the licensing exam.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which of the following is a requirement for contractors when it comes to employee payments?

Withhold federal and state taxes
Pay everyone on a 1099
Use cash only
Pay less than minimum wage

The correct answer is: Withhold federal and state taxes

Withholding federal and state taxes is an essential requirement for contractors when making payments to their employees. This is a legal obligation that ensures that the appropriate amounts are deducted from an employee's paycheck, contributing to their income tax and possibly other liabilities like Social Security and Medicare taxes. By withholding these taxes, contractors help ensure compliance with federal and state tax laws, which ultimately protects both the contractor and the employee from potential legal and financial repercussions. Additionally, managing employee payments responsibly creates a transparent and trustworthy relationship between contractors and their employees. It also simplifies the filing process for employees when they report their income on tax returns since appropriate taxes are withheld throughout the year. The other options, such as paying everyone on a 1099 or insisting on cash payments only, do not align with the standard requirements for employee payments. Paying less than minimum wage is also illegal and unethical, failing to meet labor laws designed to protect employees' rights. Such practices could lead to serious legal issues for contractors.