Today TaxMama hears from Tom in Illinois who uses a maid service and he wants to know if he should be issuing a Form 1099-MISC to the maid; or should the maid service do that?
I bring this question to you because many people use maid services and might be doing it wrong, too.
Kris Hix is right. The maid service should be issuing the Form 1099-MISC But perhaps there is something else we are not seeing.
Assuming you are a customer, do you have a contract with the maid service? Usually, they have the maids bring out a contract on the first day. If not, please get a copy of the contract from the maid service.
Essentially, although you are handing her the money, it goes to the maid service, right? If you pay in check, whose name goes on the payee line? The maids, or the service?
If you have been writing the checks directly in the name of the MAID, YOU are responsible, not for a 1099, but possibly a W-2 and a Schedule H on your tax return. If you are writing a check to the MAID SERVICE – they are.
Once this audit is resolved, if you are the customer and have been paying the maid, change the arrangement. Get a contract and start paying the maid service. AND have the maid service share in your audit assessment, since they should have been doing it this way in the first place. It’s their business. THEY are responsible for knowing how to set it up properly so the arrangement is the easiest possible for their customers. After all, they are in the business of providing convenience.
I hope this clarifies why the auditors may be disagreeing with you. You may need the help of a tax professional who has experience with Illinois audits to help make your case, and avoid any assessments.
And remember, you can find answers to all kinds of questions about household help and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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