Who are the people spewing "misinformation" about ICs?

[Anonymous]

16:11, No one needs you spewing misinformation anymore. Am so glad we finally got some correction on this question.
Thank you again to the 15:00 poster who clerified everything for us.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why are people so obsessed with this topic???

Because they're suddenly realizing that they should've been paying taxes on their domestic help, and now they're trying to justify themselves.

Realistically, they'll be under the radar of the IRS. But if the IRS did ever come a knocking, I would bet in most of these cases the IRS would define their domestic help as employees and fine them.

Of course, some of these people are paying under the table, with or without realizing it (i.e. writing a personal check out to a person).

But in either case , paying under the table or not paying payroll taxes, people should be honest with themselves.

And seriously, if a person has any doubts, they should call an accountant, a tax or employment attorney, and/or the IRS directly. But my guess is the OP doesn't want to do that because they're afraid of what the answer is, so they post the question here in the hopes they'll get a lot of people telling them what they want to hear.

Is there a rash in audits of housecleaners?. My colleague got audited and he did not get nailed for his $100/wk cash cleaner or his cash babysitter. They were busy looking at his 7 figure income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ok, are you a practicing employment attorney, who can answer, does every independent contractor have to be an LLC or some such incorporated entity? Can an individual, without being an LLC, also be a IC?

I hire ICs who are not LLCs (not for house cleaning, these are professionals).

For domestic help, it's not clear cut.

I answered a simple question, highlighted above, which was not limited to domestic help. ICs do not have to be LLCs. I know multiple people who are working freelance who are not LLCs. They work on a 1099 basis. This includes consultants, writers, editors, researchers, etc.

FWIW I give my housecleaner a w-2 as the law is, in my view and that of our accountant, quite clear cut.

[Anonymous]

The IRS is pretty clear in this publication: http://www.irs.gov/pub/irs-pdf/p926.pdf

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why are people so obsessed with this topic???

Because they're suddenly realizing that they should've been paying taxes on their domestic help, and now they're trying to justify themselves.

Realistically, they'll be under the radar of the IRS. But if the IRS did ever come a knocking, I would bet in most of these cases the IRS would define their domestic help as employees and fine them.

Of course, some of these people are paying under the table, with or without realizing it (i.e. writing a personal check out to a person).

But in either case , paying under the table or not paying payroll taxes, people should be honest with themselves.

And seriously, if a person has any doubts, they should call an accountant, a tax or employment attorney, and/or the IRS directly. But my guess is the OP doesn't want to do that because they're afraid of what the answer is, so they post the question here in the hopes they'll get a lot of people telling them what they want to hear.

Is there a rash in audits of housecleaners?. My colleague got audited and he did not get nailed for his $100/wk cash cleaner or his cash babysitter. They were busy looking at his 7 figure income.

Interesting......

[Anonymous]

Anonymous wrote:Ha! my housekeeper tells me what to do. The only time I ever tell her what to do is when she comes while we're on vacation, I'll have her clean the porch or something because she needs to be paid (but the house is clean).

Ha, ha. Growing up, our family housekeeper had us pretty well- trained.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why are people so obsessed with this topic???

Because they're suddenly realizing that they should've been paying taxes on their domestic help, and now they're trying to justify themselves.

Realistically, they'll be under the radar of the IRS. But if the IRS did ever come a knocking, I would bet in most of these cases the IRS would define their domestic help as employees and fine them.

Of course, some of these people are paying under the table, with or without realizing it (i.e. writing a personal check out to a person).

But in either case , paying under the table or not paying payroll taxes, people should be honest with themselves.

And seriously, if a person has any doubts, they should call an accountant, a tax or employment attorney, and/or the IRS directly. But my guess is the OP doesn't want to do that because they're afraid of what the answer is, so they post the question here in the hopes they'll get a lot of people telling them what they want to hear.

Is there a rash in audits of housecleaners?. My colleague got audited and he did not get nailed for his $100/wk cash cleaner or his cash babysitter. They were busy looking at his 7 figure income.

Haven't heard of any rash in audits of housecleaners, just domestic payroll companies trying to drum up more business.

[Anonymous]

How come this thread just got moved over here to Money and Finances, but the other thread about how your housecleaner is always your employee, stayed in the Off Topic section?

[Anonymous]

Bump

[Anonymous]

Anonymous wrote:

Anonymous wrote:But must I prepare a 1099 for a weekly cleaning lady?

Chances are you should not prepare a 1099 and instead should pay employment taxes.

15:00 is not contradicting what is in the other thread-- that post just points out that there are employees and independent contractors and the difference is based on the nature of the work and control that can be exercised by the employer and not by extraneous things like the tax form or LLC status.

Separate is the question of whether an individual housekeeper is ever likely to be treated as an independent contractor. The answer to that is almost always no. Can you really imagine a situation where you have no right to give your house cleaner directions as to how you want your house cleaned?

Lots of cleaners tell you what they will and will not do.
They know how they will do their work. They tell you when they can fit you in, with their existing clients.

[Anonymous]

Anonymous wrote:The IRS is pretty clear in this publication: http://www.irs.gov/pub/irs-pdf/p926.pdf

And it gives an example:

You made an agreement with John Peters
to care for your lawn. John runs a lawn care business and
offers his services to the general public. He provides his
own tools and supplies, and he hires and pays any help-
ers he needs. Neither John nor his helpers are your
household employees.

Therefore if a housecleaner comes to your home once in a while, with her own supplies, and even brings someone to help her - then she is NOT an employee.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The IRS is pretty clear in this publication: http://www.irs.gov/pub/irs-pdf/p926.pdf

And it gives an example:

You made an agreement with John Peters
to care for your lawn. John runs a lawn care business and
offers his services to the general public. He provides his
own tools and supplies, and he hires and pays any help-
ers he needs. Neither John nor his helpers are your
household employees.

Therefore if a housecleaner comes to your home once in a while, with her own supplies, and even brings someone to help her - then she is NOT an employee.

Agreed. Thank you. There seems to be at least one person here with an invested interest in fear mongering. Don't know who else, besides domestic payroll companies, who would so fiercely promote misinformation. Their efforts seem to have backfired.

[Anonymous]

But if you have an arrangement with you housekeeper that she comes every Tuesday and it is not a one-time gig, it is less clear. Pub 926 refers to Pub 15-A, which goes through the common law test for employer-employee relationships.

http://www.irs.gov/pub/irs-pdf/p15a_12.pdf

Some of it depends on your facts and some of it depends on your risk tolerance (I am risk averse). If you hire a cleaning company and three or four ladies show up and you make up one check to XYZ Cleaning Co. and they bring their own stuff and hand you their standard list of what they do and don't do, you are probably ok even if you have had them show up on every Monday morning for 6 years (although it isn't clear).

If, on the other hand, Sally shows up every Monday and uses your suff to clean and you give her vacation/sick days, then you probably have an employee.

I've had both and treated XYZ Cleaning Co. as an IC and Sally as an employee.

[Anonymous]

Yes, I agree that the bigger the benefits package, the more clear that you have an employee.

[Anonymous]

okay, people, if you don't agree and feel so firmly that your housekeeper, maid, house cleaner, or whatever, is an independent contractor and you don't have to pay taxes, then why do you care what is being posted here?

Why are you so defensive? I think the poster you all are
attacking is pointing out that it's a grey area. Domestic help is not really the same as other services you get done

If you don't think it's a problem for you, then don't read the forum. If you are uncertain, ask an accountant. If you can afford a f*cking maid, I'm sure you can afford an accountant.

I don't see what the problem is.

Seriously, what do you people care what is being posted on a forum? Methinks you all doth protest too much.

But it is funny as hell following this thread.