If you have cleaning help, on an in-home sitter, do you withhold taxes?
If you hire an individual to come to your home on a regular basis, whether to watch your children, clean your house, or do yardwork, and you pay them at least $1700 a year, do you provide them with a W-2 or 1099?
I’m thinking about getting housecleaning help, and found someone with good references who will clean my house once a week for $100. She wants to be paid in cash, and doesn’t want a W-2 or 1099. A commercial cleaning service wants $180 a week.
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7 Answers
@BarnacleBill: JUst be sure not to run for public office. Remember Nannygate?
@gailcalled, LOL. I’m really hesitant to pay her under the table, and will probably continue to clean my own house rather than be held hostage by a cleaning service that wants almost $200 a week. That’s a serious chunk of my take-home pay every two weeks. On the other hand, I am convinced through experience that if I do something not on the up-and-up, I will get caught and it will not be worth the hassle.
I figured out this woman is taking home about $26,000 a year cleaning houses, tax free, working a 6 hour day. That’s like earning $40,000 a year. Do I want to enable that for this person, so I can have affordable housecleaning? Am I assuming all the risk?
How about a compromise, which is what I do with my housecleaner? I have her come every other week. @$70, and skipping several holidays, a vacation and illness, we work out to 24 weeks.
Usually she can be considered an independent contractor and would thus be liable to pay taxes on her own. If she earns enough to be required to pay taxes, it is her responsibility to do so, not your concern. If she cheats the IRS, let them worry about it. If you are still uncomfortable about this, keep good records and bring it up with H&R block or whomever you hire to help you do your taxes.
@tigress3681, if she’s an independent contractor, then I’m required to provide her with a 1099 form and show it on my tax return. Tax penalties from this can be a royal pain in the ass.
Well, in that case, the way I see it, you have 4 options
1. pay under the table
2. withhold taxes
3. treat her as independent
4. Hire a 3rd party maid service like Merry Maids <—solves the problem, although pays the cleaner less per job (more jobs overall tho, since they have advertising)
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