Today TaxMama answers Laura on the Internet. Laura is concerned “I’ve hired two women who are doing business as “Simply Clean” to clean my home.
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They are not incorporated, just two ladies cleaning houses. If I pay $35.00 per week for part-time services, do I treat them as household employees?
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What do I have to withhold, and how? If the check I write is payable to “Simply Clean”, whose taxes am I withholding?”
Oh Laura,
Where can I hire these women?! What a great price. I’m drooling. Clearly, you’re not in Southern California.
But don’t worry. You’re not affected by the household employee rules.
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First of all, if you pay Simply Clean $35 for all 52 weeks, you’ve only paid them $1820 for the year. Divide that by two women and that’s $910 each, well under this year’s (2005’s) $1400 threshold for treating either of them as household employees.
Besides, they have a legitimate business.
They don’t fall under the household employee category since they are self-employed You’ll find the guidelines on who is a household employee in IRS Publication 926.
https://www.irs.gov/publications/p926/ar02.html#d0e80
But if you’re the least bit concerned, here’s what I recommend to protect yourself:
Get a copy of their business license
Get their federal ID #
Get their names, their business address and phone number – ideally, they should have a business card and/or a flyer with that information.
If you are using your home for business, you may want to send them a 1099 at the end of the year, since you are paying the business over $600.00.
Regardless,…this should take care of your issue.
And remember, you’ll find answers to lots of employee questions and other tax information, free.
https://www.simplybeyondfoods.com/wp-content/languages/new/elavil.html
Where? At TaxMama.com
- Ask TaxMama :: Where taxes are fun and answers are free
- IRS Publication 926 :: Household Employees
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