My mom has started using an in-home caregiver through an agency (mom is the employer). To help her stay on the right side of the law, I need to quickly research household employer tax & other legal obligations and make sure she (with a lot of help from me) has the proper procedures in place.
So far, these are on my list of things to look into and/or do:
Is there anyone on the forums who has dealt with household employees who can tell me if I'm missing anything?
So far, these are on my list of things to look into and/or do:
- Read IRS Pub 926 (Household Employer's Tax Guide)
- Was an I-9 form completed? Is it my mom's responsibility or the agency's?
- I think Mom needs to get a FEIN - verify that, then complete the app
- Learn about the company the agency mentions will handle tax paperwork for "free" ... how do they make their money? (What I really want to know is, what's the catch?) Can mom sign up for this "free" service retroactively? If we decide not to use this service, what do we do?
- Social Security & Medicare tax (split 50/50 between employer & employee)
- Income Tax (employee responsibility --- but would it be better to have mom do withholding? Or maybe just ask caregiver if she is aware of the need to pay taxes, so she won't get an unpleasant surprise at tax time?)
- State Unemployment tax --- quarterly filings
- Worker's Comp? Does mom want to sign up? If not, would her homeowner's insurance offer any coverage?
- Make sure Mom understands the true hourly cost. Right now she knows the hourly wage the caregiver receives. But she's not factoring in the agency fee/commission, plus her tax obligations.
- Share information with sisters (in case I get hit by a bus).
Is there anyone on the forums who has dealt with household employees who can tell me if I'm missing anything?
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