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

[Anonymous]

Anonymous wrote:22:49, are you the OP?

no

[Anonymous]

Anonymous wrote:

Anonymous wrote:22:49, are you the OP?

no

In that case, it is not you, who is "adamently attempting to bend the law", so why are you being defensive? It is clearly the OP who is trying to mislead DCUM readers with her relentless fear mongering.

[Anonymous]

Anonymous wrote:

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?

Why is this blatantly misleading thread title allowed? OP should at least be accurate with her pronouncement and qualify that her statement applies to some, or maybe even many, situations, but certainly not all.

[Anonymous]

Anonymous wrote:

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?

If you're not the OP, why are you responding for her? We want to understand the misleading subject line of this thread.

[Anonymous]

But many individuals hold themselves out as owning their own cleaning service.

[Anonymous]

You people are crazy. "we want to understand the misleading subject line of this thread."

Are you f*cking kidding me? Have all of the thread titles on DCUM gone through this kind of scrutiny?

The OP seems pretty clear to me: a lot of people don't realize they need to pay taxes.

If you're certain you don't, then what the h*ll is your problem? Just ignore the thread.

It's been discussed at length in this thread that there are exceptions, but that people should still check to make sure they don't have to if they're employing an individual to clean their house.

What is your problem? I believe the original post ultimately asks a questions -- do you pay employment taxes for your maid? If you don't and you don't think you should, then why do you care about the post?

[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. I had a situation where I was considering myself an IC, as was my employer. My employer was issuing me a 1099. I *wanted* to be an IC, because it enabled me to deduct some expenses. The employer wanted me to be an IC because she then didn't have to play unemployment insurance, employer-paid Social Security, et cetera. The IRS audited my employer and determined that I was not an IC, that I was an employer. The IRS fined my employer. They settled and had to pay some back taxes and a fine. The IRS left me alone.

The reason the IRS cares is that the taxes an IC pays are a lot less than the taxes an employer would pay on an employee. Remember, the IC is only paying the employee's portion of taxes and Social Security. With an employee who is not an IC, the employee pays taxes as does the employer. Not to mention, unemployment insurance is also paid (and that isn't the case with an IC). That is why the IRS cares, and that is why there has been some cracking down in certain industries.

Again, it doesn't matter if the housekeeper pays her taxes. That's not what defines whether or not she is an employee. The IRS has rules. Some of them are kind of vague or not entirely clear (as in the "does the person determine their own work"). But I'm telling you from experience that the IRS usually errs on the side of defining a person as an employee versus an IC (that is if they audit, which is probably unlikely in the case of individual households hiring maids).

[Anonymous]

sorry, I meant "pay" instead of "play" and that they determined that I was an employee in the post above.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our housekeeper is self-employed. She cleans at least a dozen other houses. There are online questionaires you can fill out to find out if you have to pay taxes.

If you are the sole employer, then you may be on the hook.

Exactly. We don't pay taxes on our cleaner for this reason - she is not my employee.

That is NOT the definition of an independent contractor vs a household employee. She can easily have more than one job, one of which is as your household employee housecleaner. The number of employers has no bearing on whether she is an household employee or not. If she uses your household supplies and/or you issue her instructions on what to do, when to show up, or how to clean, then she is a household employee. If you hire her as a service, she provides the supplies, and she provides a fixed set of services without your instructions or special requests addressed, then she may be an independent contractor.

Are these rules supposed to be as murky as they sound? Really.

Yes, they are as murky as they sound. My guess is that they are intentionally murky. Because then the IRS can kind of make the determination.

[Anonymous]

I have a question - how many people have been prosecuted for failing to pay payroll taxes on a once-a-week cleaner?

[Anonymous]

Anonymous wrote:I have a question - how many people have been prosecuted for failing to pay payroll taxes on a once-a-week cleaner?

Very good question, pp, but hmmm, no takers.
Interesting.

[Anonymous]

Anonymous wrote:
The reason the IRS cares is that the taxes an IC pays are a lot less than the taxes an employer would pay on an employee. Remember, the IC is only paying the employee's portion of taxes and Social Security.

And this is so not true. An IC must pay both portions - for the employee and the employer. But no unemployment tax though.