Paying a domestic helper
We want to use the services of a childminder/home help and the candidate has broached the idea of her being self employed - I pay her without withholding anything and she sorts out the taxes, medicare, California stuff, etc etc. Is this allowed? All I can find is http://www.irs.gov/publications/p926/ar02.html which tells me what I need to do if I sort out the taxes, but not whether she can do it herself.
Thanks. |
Re: Paying a domestic helper
Just make sure she's a 'legal', employment-authorized worker.
Regards, JEff |
Re: Paying a domestic helper
And make sure you have big insurance coverage....in case he or she falls in your home.
Jim. |
Re: Paying a domestic helper
Originally Posted by jeffreyhy
(Post 10664888)
Just make sure she's a 'legal', employment-authorized worker.
Regards, JEff |
Re: Paying a domestic helper
Thanks. Is that a "yes" then, ie she can sort out her own taxes etc?
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Re: Paying a domestic helper
Originally Posted by GeoffM
(Post 10664904)
Thanks. Is that a "yes" then, ie she can sort out her own taxes etc?
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Re: Paying a domestic helper
Originally Posted by Pulaski
(Post 10665007)
Probably.... you wouldn't withhold taxes for a plumber.... but you might want to find out if you have an obligation to report what you paid her, albeit gross.
Originally Posted by Pulaski
(Post 10665007)
Also, If I remember correctly, if you have a business you have to start withholding taxes when you have more than four employees.
Thanks. |
Re: Paying a domestic helper
You might also want to take a look at this.....
http://www.taxes.ca.gov/Payroll_Tax/household.shtml My concern Geoff is that you PROTECT YOURSELF....ie: should you ever have a falling out with someone you've hired - you want to be sure you're on the right side of the law - right? ps: Look at this as well: http://www.irs.gov/pub/irs-pdf/i1040sh.pdf |
Re: Paying a domestic helper
Originally Posted by GeoffM
(Post 10664843)
We want to use the services of a childminder/home help and the candidate has broached the idea of her being self employed - I pay her without withholding anything and she sorts out the taxes, medicare, California stuff, etc etc. Is this allowed? All I can find is http://www.irs.gov/publications/p926/ar02.html which tells me what I need to do if I sort out the taxes, but not whether she can do it herself.
Thanks. http://www.irs.gov/taxtopics/tc602.html |
Re: Paying a domestic helper
Originally Posted by Michael
(Post 10665067)
That document just defines what is a household worker but I think you would likely want to refer to the child and dependent care tax credit document in order to get the tax credit.
http://www.irs.gov/taxtopics/tc602.html |
Re: Paying a domestic helper
There is a threshold amount after which you have to pay what is known colloquially as the 'nanny tax'. I think the amount is the trigger, not their wishes. Maybe if they were incorporated as an LLC or something you could pay them as a service.
http://workingmoms.about.com/od/fina...t/Nannytax.htm |
Re: Paying a domestic helper
Originally Posted by penguinsix
(Post 10665213)
There is a threshold amount after which you have to pay what is known colloquially as the 'nanny tax'. I think the amount is the trigger, not their wishes. Maybe if they were incorporated as an LLC or something you could pay them as a service.
http://workingmoms.about.com/od/fina...t/Nannytax.htm |
Re: Paying a domestic helper
"Nanny" or whatever, it's just a nickname to make it easier to remember. Technically it's part of the "Household Employee" rules but since most Americans think having a butler and valet and whatnot is a bit too posh a la Downton Abbey so they just say 'nanny tax' as an easier way to refer to the law.
http://www.4nannytaxes.com/index.cfm...t/nanny-taxes/ The "nanny tax" applies to any houseworker. "Household employees include nanny, babysitter, companion, housekeeper, cleaning lady (individual), maid, cook, personal assistant, senior caregiver, house manager, caretaker, butler, valet, and driver." Note on that link there is away around this if they meet some specific rules: http://www.4nannytaxes.com/index.cfm...or-contractor/ |
Re: Paying a domestic helper
Originally Posted by penguinsix
(Post 10665287)
"Nanny" or whatever, it's just a nickname to make it easier to remember. Technically it's part of the "Household Employee" rules but since most Americans think having a butler and valet and whatnot is a bit too posh a la Downton Abbey so they just say 'nanny tax' as an easier way to refer to the law.
http://www.4nannytaxes.com/index.cfm...t/nanny-taxes/ The "nanny tax" applies to any houseworker. "Household employees include nanny, babysitter, companion, housekeeper, cleaning lady (individual), maid, cook, personal assistant, senior caregiver, house manager, caretaker, butler, valet, and driver." Note on that link there is away around this if they meet some specific rules: http://www.4nannytaxes.com/index.cfm...or-contractor/ (and with regard to the "posh" ideas, this is actually working out about the same cost as sending two kids to daycare, plus we get other help too!) |
Re: Paying a domestic helper
Originally Posted by GeoffM
(Post 10665262)
yet she's not just a nanny
Might be worthy of note that I'm at home all day with her. I get the impression most are paid cash in hand and documentation may be an issue. |
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