people don't realize they have to pay payroll taxes on individual housecleaners

[Anonymous]

Anonymous wrote:We pay $75 a week but 3 people come, so technically, we pay each person $25 a week and that only totals $1300 a year each, leaving us beneath the threshold.

Ha! Are you making out three separate checks?

[Anonymous]

Anonymous wrote:I think even if someone would be an independent contractor under most definitions, it they are a housekeeper special rules apply - and you have to pay taxes legally. so just pay in cash.

Special rules for housekeepers? That's news to me. Does my gardening service have special rules to, according to you?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes. We use a payroll service. She even has direct deposit from us. In DC you may need workers' comp insurance for our housecleaner, too. We do (and have it).

Who told you that? Your payroll service?

No. My insurance agent. I didn't believe him, so then I looked up the law for myself. It's pretty scary. Technically even some occasional babysitters are covered.

Oh stop. There's nothing "pretty scary" about the law. What on earth are you talking about?

Look it up, PP. The hours thresholds and dollar amounts that trigger the obligation are shockingly low in DC. It is very pro-employee. I find it scary that I would need to add the college girl that sits for us occasionally to our workers' comp policy (at a premium of $500 per year per employee), but maybe you don't. If you already have a full staff covering 10 people and one more is no skin off your nose, well then bully for you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think even if someone would be an independent contractor under most definitions, it they are a housekeeper special rules apply - and you have to pay taxes legally. so just pay in cash.

Special rules for housekeepers? That's news to me. Does my gardening service have special rules to, according to you?

Go to www.irs.gov. Read publication 926. There are not special rules for housekeepers. There are special rules for all household employees.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think even if someone would be an independent contractor under most definitions, it they are a housekeeper special rules apply - and you have to pay taxes legally. so just pay in cash.

Special rules for housekeepers? That's news to me. Does my gardening service have special rules to, according to you?

Go to www.irs.gov. Read publication 926. There are not special rules for housekeepers. There are special rules for all household employees.

Including the personal assistant?

[Anonymous]

Anonymous wrote:Are payroll service companies getting a bad rap or did this thread back fire?
The subject line of this thread is somewhat misleading, to say the least, but it certainly should boost business.

OP, would you like to rephrase your subject line, or are you sticking to your guns?

[Anonymous]

I'm the OP. No, I don't not run a payroll company. It's a spin-off from another thread. I have no vested interest in whether or not people pay the appropriate taxes for their domestic help.

I raised it as an issue because most people didn't seem to realize that there are special rules for domestic help -- i.e. people you hire to work in your home.

I wonder if any IRS employees follow these threads.

And by the way, you don't need to hire a payroll company to pay taxes for your help. There are plenty of free online resources available. Your accountant probably could help you as well.

[Anonymous]

Anonymous wrote:
I don't think this is true. I work as a personal assistant and make about $12000 a year from one family. They issue me a 1099 at the end of the year and I have to pay all taxes, both employee side and employer side, as an independent contractor. I am not an LLC. We get our taxes done by a very reputable accountant and my husband is a lawyer who would never run the risk of breaking the rules over something like this. A housecleaner who comes in once a week or once every two weeks and works for a number of different families can definitely be an independent contractor without being an LLC. If you issue her a 1099 at the end of the year, the IRS will know that she has to pay taxes on that income and it won't be under the table.

Leaving aside the housecleaner issue, I don't see any way at all a personal assistant is not going to be classified as an employee (and once more people-- it's bass-ackwards to say that because you got a 1099 you must be a contractor; whether you are an employee or not is determined by the facts, not by how you paper it).

The very definition of a personal assistant is someone who does stuff for you. Have you described your work to your accountant and asked him whether you should be treated as an employee or IC? My WAG is that your employer is just taking advantage of you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think even if someone would be an independent contractor under most definitions, it they are a housekeeper special rules apply - and you have to pay taxes legally. so just pay in cash.

Special rules for housekeepers? That's news to me. Does my gardening service have special rules to, according to you?

Go to www.irs.gov. Read publication 926. There are not special rules for housekeepers. There are special rules for all household employees.

Including the personal assistant?

I'm the PA who posted earlier. I still don't see how the arrangement I have with my employer (and therefore a housekeeper who chooses it) is doing something wrong. If my employer and I agree that I am a 1099 employee and he issues me a 1099 and I pay all the required taxes, doesn't that make me an IC by definition, regardless of whether or not I use his supplies, which I do, or if he gives me specific directions, which he does? If a housekeeper accepts a 1099 and pays all the required taxes, doesn't that make her an IC? The IRS doesn't care which tax relationship you enter into with the people who do work in your home, just that that relationship is legal and all taxes are paid. Since the definition of "domestic help" is loose, people who comply with the law in either way would seem to be fine. I can see why a housekeeper wouldn't want to accept a position if she didn't want to pay taxes like an IC, but not why the IRS would care how the taxes get paid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
I don't think this is true. I work as a personal assistant and make about $12000 a year from one family. They issue me a 1099 at the end of the year and I have to pay all taxes, both employee side and employer side, as an independent contractor. I am not an LLC. We get our taxes done by a very reputable accountant and my husband is a lawyer who would never run the risk of breaking the rules over something like this. A housecleaner who comes in once a week or once every two weeks and works for a number of different families can definitely be an independent contractor without being an LLC. If you issue her a 1099 at the end of the year, the IRS will know that she has to pay taxes on that income and it won't be under the table.

Leaving aside the housecleaner issue, I don't see any way at all a personal assistant is not going to be classified as an employee (and once more people-- it's bass-ackwards to say that because you got a 1099 you must be a contractor; whether you are an employee or not is determined by the facts, not by how you paper it).

The very definition of a personal assistant is someone who does stuff for you. Have you described your work to your accountant and asked him whether you should be treated as an employee or IC? My WAG is that your employer is just taking advantage of you.

I am not a slave or an indentured servant. I can choose to stop working for him if I don't like the arrangement. He pays really well by the hour, so it is a good, flexible job for me while I am in grad school even though I have to pay my own employment taxes. If he paid my employment taxes, he would just lower my hourly wage, so he would be spending the same money, I would be making the same money, and the IRS would be getting the same money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
I don't think this is true. I work as a personal assistant and make about $12000 a year from one family. They issue me a 1099 at the end of the year and I have to pay all taxes, both employee side and employer side, as an independent contractor. I am not an LLC. We get our taxes done by a very reputable accountant and my husband is a lawyer who would never run the risk of breaking the rules over something like this. A housecleaner who comes in once a week or once every two weeks and works for a number of different families can definitely be an independent contractor without being an LLC. If you issue her a 1099 at the end of the year, the IRS will know that she has to pay taxes on that income and it won't be under the table.

Leaving aside the housecleaner issue, I don't see any way at all a personal assistant is not going to be classified as an employee (and once more people-- it's bass-ackwards to say that because you got a 1099 you must be a contractor; whether you are an employee or not is determined by the facts, not by how you paper it).

The very definition of a personal assistant is someone who does stuff for you. Have you described your work to your accountant and asked him whether you should be treated as an employee or IC? My WAG is that your employer is just taking advantage of you.

I am not a slave or an indentured servant. I can choose to stop working for him if I don't like the arrangement. He pays really well by the hour, so it is a good, flexible job for me while I am in grad school even though I have to pay my own employment taxes. If he paid my employment taxes, he would just lower my hourly wage, so he would be spending the same money, I would be making the same money, and the IRS would be getting the same mToney.

To the personal assistant, thank you sharing the arrangements of your professional situation. I personally don't believe that OP has no invested interest in misleading DCUM readers. She is adamenting attempting to bend existing laws, by misrepresenting the facts, and refuses to come clean, even though she's been outed.

[Anonymous]

I don't know if anyone mentioned that before, but if you consider a housecleaner your employee and issue her a W-2, then she wouldn't be able to deduct her business expense (supplies, transportation, helpers' salary, etc.) on her tax return.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think even if someone would be an independent contractor under most definitions, it they are a housekeeper special rules apply - and you have to pay taxes legally. so just pay in cash.

Special rules for housekeepers? That's news to me. Does my gardening service have special rules to, according to you?

Go to www.irs.gov. Read publication 926. There are not special rules for housekeepers. There are special rules for all household employees.

Including the personal assistant?

I'm the PA who posted earlier. I still don't see how the arrangement I have with my employer (and therefore a housekeeper who chooses it) is doing something wrong. If my employer and I agree that I am a 1099 employee and he issues me a 1099 and I pay all the required taxes, doesn't that make me an IC by definition, regardless of whether or not I use his supplies, which I do, or if he gives me specific directions, which he does? If a housekeeper accepts a 1099 and pays all the required taxes, doesn't that make her an IC? The IRS doesn't care which tax relationship you enter into with the people who do work in your home, just that that relationship is legal and all taxes are paid. Since the definition of "domestic help" is loose, people who comply with the law in either way would seem to be fine. I can see why a housekeeper wouldn't want to accept a position if she didn't want to pay taxes like an IC, but not why the IRS would care how the taxes get paid.

No, no, no. This is exactly wrong. If you bother to read a single publication, or even webpage, from the IRS or the DOL you would see that. For example, look at this page (and the pages it links to) and tell me where it says that the filing of a 1099 is the least bit relevant to the question. The relevant factors are things like
Does the company control or have the right to control what the worker does and how the worker does his or her job?
Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
I don't think this is true. I work as a personal assistant and make about $12000 a year from one family. They issue me a 1099 at the end of the year and I have to pay all taxes, both employee side and employer side, as an independent contractor. I am not an LLC. We get our taxes done by a very reputable accountant and my husband is a lawyer who would never run the risk of breaking the rules over something like this. A housecleaner who comes in once a week or once every two weeks and works for a number of different families can definitely be an independent contractor without being an LLC. If you issue her a 1099 at the end of the year, the IRS will know that she has to pay taxes on that income and it won't be under the table.

Leaving aside the housecleaner issue, I don't see any way at all a personal assistant is not going to be classified as an employee (and once more people-- it's bass-ackwards to say that because you got a 1099 you must be a contractor; whether you are an employee or not is determined by the facts, not by how you paper it).

The very definition of a personal assistant is someone who does stuff for you. Have you described your work to your accountant and asked him whether you should be treated as an employee or IC? My WAG is that your employer is just taking advantage of you.

I am not a slave or an indentured servant. I can choose to stop working for him if I don't like the arrangement. He pays really well by the hour, so it is a good, flexible job for me while I am in grad school even though I have to pay my own employment taxes. If he paid my employment taxes, he would just lower my hourly wage, so he would be spending the same money, I would be making the same money, and the IRS would be getting the same mToney.

To the personal assistant, thank you sharing the arrangements of your professional situation. I personally don't believe that OP has no invested interest in misleading DCUM readers. She is adamenting attempting to bend existing laws, by misrepresenting the facts, and refuses to come clean, even though she's been outed.

First of all, I can tell you that there are multiple people posting on this thread trying to explain how the law actually works, because I am one of them but not the only one.

Second, we'll just have to disagree as to who is "adamantly attempting to bend existing laws", but I am perfectly happy to provide links to support what I am saying.

Third, I have no "invested interest" in misleading DCUM readers-- it's actually the opposite. It bugs me to see people misrepresenting the law. If you don't want to comply-- that's your business but don't pretend the rules are different than what they are.

[Anonymous]

22:49, are you the OP?