Household employees and unemployment tax, what is that?

[Anonymous]

Anonymous wrote:My understanding for cleaning people is that it is dependent on whether they are self-employed contractors or if they are your employees. If she brings her own vacuum and cleaning supplies, she is self-employed and you don't pay her taxes or unemployment. However, if she uses your supplies, she is your household employee.

Highly recommend IRS publication 926: http://www.irs.gov/pub/irs-pdf/p926.pdf

"If only the worker can control how the work is done, the worker is not your employee but is self-employed. A self-employed worker usually provides his or her own tools and offers services to the general public in an independent business."

[Anonymous]

I think the distinction above is between a service and an individual, as others have noted. I personally would not take the risk with an individual, even if s/he brings their own supplies, unless you know for sure they are filing their taxes as a self employed business. Frankly the amount of money is relatively small and the risk relatively high. As someone noted the paperwork is a pain because you have to do it quarterly, but it really only takes a few minutes once you've done it a couple of times.

[Anonymous]

Anonymous wrote:My understanding for cleaning people is that it is dependent on whether they are self-employed contractors or if they are your employees. If she brings her own vacuum and cleaning supplies, she is self-employed and you don't pay her taxes or unemployment. However, if she uses your supplies, she is your household employee.

Problem solved. She will have to start "bringing" her own things.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My understanding for cleaning people is that it is dependent on whether they are self-employed contractors or if they are your employees. If she brings her own vacuum and cleaning supplies, she is self-employed and you don't pay her taxes or unemployment. However, if she uses your supplies, she is your household employee.

Problem solved. She will have to start "bringing" her own things.

You might want her to print up business cards, take out advertisements in the newspaper, etc. Just her own things probably won't pass an audit. And don't forget to 1099 her so your KNOW her income is being reported.

[Anonymous]

From today's NY Times...

THE NANNY TAX While I wrote about the nanny tax issue a few weeks ago, Ms. Killefer’s problem with unemployment taxes for household help suggests the need for a couple of reminders. If you have a babysitter or home health aide or housekeeper, you’re probably responsible for more than just their Social Security and Medicare taxes. There may also be payments related to unemployment or disability insurance or workers’ compensation coverage.

If you make mistakes, and the authorities catch up with you, pay the back taxes and fines promptly. And if your accountant expresses even a smidgen of doubt about how to handle all of this, look to a specialist like Breedlove & Associates, the Nanny Tax Company or HomeWork Solutions for help with the blizzard of paperwork that you’ll need.

[Anonymous]

but for the average person with a bi-monthly housekeeper who probably will never get a job in government in which they will have to pass Senate confirmation, how likely is is the IRS will catch them not paying taxes for their housekeeper?

[Anonymous]

depending on how much you pay and where you live you may not meet the income limits for unemployment tax. but if you do meet it why take the chance over a few dollars. Or if you don't want to hassle with it simply hire a service where you don't have to worry about it.