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We know the stress and uncertainty created by complicated household payroll and tax laws. We’re here to help clear up the confusion.
We're household employment experts so you don't have to be. For those who want to learn more, we've distilled all the complex tax and legal code into brief, easy-to-understand answers – or you can always just give us a quick call and we’ll walk you through it.
Here's what every family needs to know.
The IRS defines a household employer as someone who pays an individual to perform duties in or around their home and has the right to control when, where, how or by whom the work should be performed. Household employees include nannies, senior caregivers, housekeepers, nurses, personal assistants, chefs, estate managers, etc.
You may hear that it's okay to "1099" your worker (Form 1099 is the form used to report payments to an independent contractor). However, with few exceptions, the IRS considers the worker to be your employee, not an independent contractor. Please know that worker misclassification is considered tax evasion and can lead to expensive problems (see "The 1099 Trap"). Please contact us if you have questions about how to classify your domestic worker.
Household employers have three primary tax responsibilities:
Important Note: Each state has unique compliance nuances. Click here to learn how it works in your state.
The information herein is general in nature and may not be applicable to or suitable for your specific circumstances. Accordingly, the information is not intended to be providing legal or tax advice, and should not be relied upon without the advice and guidance of a professional tax or legal advisor.
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