To pay privately for PCAs, could I hire them as an independent contractor and then file a 1099? Or would they have to get a W2? And how do I go about doing that?
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HIRE them as independent contractors. 99% of private caregivers work for cash only.
If you want them to get audited then send an earnings statement to them and IRS each Jan. -
Once they are on the books you'll need to comply with other things as well, such as your state income tax, unemployment tax, disability insurance and workers compensation insurance. These things are all triggered by really minimal wages. If you can afford it, it is best to protect yourself by having these things, as the last thing you need is an injury in your house and the worker is suddenly no longer your friend, and they want compensation.
You'll need to pay the 7.625% Social Security and Medicare tax for the employer. Employee can pay their own, or you can deducted for them. In my case, I file a schedule H, for household employees and it is reconciled against my personal income tax.Comment
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That needs to be done for a 1099 employee? Some other people I talk to made it sound like if hired them as a independent contractor, I'll I have to do is file a 1099.
What do you mean by "These things are all triggered by really minimal wages"?Comment
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For instance, the necessity for unemployment coverage is triggered by something like $2000/quarter (I forgot the exact number). I had a weekend morning only off the books employee. She knew it, and she was also a wacko. We had a bad separation and she put in for unemployment. I wasn't paying attention close enough, completed the form na?vely, and got hit up with a letter from my local state government pointing out my violation.
Luckily, I was able to weasel out of it because she was terminated for insubordination, which eliminates your eligibility for unemployment.
I learned my lesson, though.Comment
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