This question (and I am full of them these days,) refers to the issue of income taxes and hiring aides. I am aware that by hiring through an agency, there is nothing I need to do regarding the aides' taxes.
What if I hire a self-employed person? Our county maintains a list of such workers. Payment and responsibilities would be negotiated between me and the aide. What would I need to know about the aide's income taxes, if anything? Withhold? Leave it up to him/her? No clue.
It's been awhile and tax rules may have changed some, but you would have to pay their share of social security (as well as your share); withhold taxes, depending on how they fill out their W-4; and file quarterly tax returns with the payments dues for the prior quarter. Lots of paperwork, but it can be done. Got the irs.gov site and you can download the publication explaining this. Probably would need workers comp also. Or, if you have a CPA or accountant, they may do it for you.
Had to use an agency to get LTC policy to pay; consequently, I haven't had to deal with this issue. However, I have observed that many are comfortable with paying household help "under the table". As long as you aren't planning on becoming a political appointee...and can tolerate some risk. Have been advised that the W/C coverage is a must, whether paying taxes or not (and there's no relationship).
Right, the worker's comp is another thing. I would not worry so much about the tax issue if I were just hiring someone periodically, similar to how one might employ a babysitter for kids. As a regular thing though...maybe.
emily, depends on your risk tolerance as mentioned above. I understand many people hire aides privately and usually don't pay the taxes and leave it up to the aide as an individual contractor to pay their own taxes. like Marilynn, we have to use an agency to qualify for DH's LTC insurance, so I don't know how to do all the tax stuff that is "required".
Also, WC is a must if you have someone in your home-you should contact the company that has your homeowners policy and inquire about adding WC coverage for in-home workers. You should also consider getting an umbrella policy in addition to your homeowners. It typically covers liability claims which may exceed your home owners or automobile insurance.
If you do hire them as 'contract labor' you have to make sure you file a 1099 if you pay them more than $600. Also, some states have requirements for contract labor - usually the person has to have 2 or more employers. IF not, the IRS and/or state will go back to the single employer and collect all taxes plus penalties.
I have full time care for my DH and I use Intuit online payroll for my five part time caregivers. It was easier than I expected and I prefer hiring my own caregivers vs agency.