Do I need to provide a tax form for Babybird's caregivers?

[Deleted]

Jan 17, 2014 15:30:33 GMT -5 mwcpa said:

and Congress has drafted an amendment to exempt themselves...

ROFL!

It's funny because it's true.

[taxref]

Regardless of the system of taxation (whether an income tax, a national sales tax, tariffs, or whatever), there will be 2 primary sources at work to try to undermine the system.

The first is the traditional tax cheat.  The kind of person who now does not report his under the table income, will be the kind of person who will sell goods under the table to evade charging a national sales tax.

The second is the current scourge of a simpler tax code, special interest groups.  If a national sales tax or tariffs replaced the current tax systems, all industries and political causes would still be sending their lobbyists, and contributing to political campaigns, to have special rules passed to benefit themselves.  Soon certain things would be exempt, or certain things taxed lower than others, or certain groups would get credits.   Soon that simple sales tax would be rife with complexities.

[TheOtherMe]

Jan 17, 2014 15:30:33 GMT -5 mwcpa said:

who has ever been offered from the local plumber to pay cash and he would not charge sales tax... do not tell me this would happen less if a fair tax was put into place...

when there is a rule, regulation, law, etc, within 3 minutes of its start someone has figured out a way to beat it or cheat it and Congress has drafted an amendment to exempt themselves...

I was on a car repair.  

As for Household Employees, if you pay over $1000 in any calendar quarter, you need to pay unemployment taxes as well as Social Security taxes and Medicare taxes.  Some nannys want tax withheld.

These taxes are all paid on your 1040 on Schedule H.  You would need to issue W2s to the household employees.  It is also a good idea to contact your insurance company.  

Audited someone whose housekeeper fell and he had to pay her medical bills out of pocket as he had no workmen's comp coverage on her.

[rangerj]

If the licensed caregiver is operating as an independent contractor then a 1099 is required if the amount paid for the year equals or exceeds the statutory amount. If said care giver is not a corporation or LLC elected to file as a corporation then a form W-9 is required and "back-up withholding" may be required if he/she refuses to provide the information required. The same is true for the third care giver. If you are paying your mother for services that is NOT a GIFT, period. If your mother provides the services in your home she is a household employee and the forms for that category need to be completed and filed (e.g. form 942, 940, w-2, etc.). State law may make it necessary for workmen's compensation insurance to be obtained and may also require a license for the care giver. Every paid tax preparer has an obligation to prepare the required TAX RETURNS AND INFORMATION RETURNS as correctly as possible. To do otherwise is not only illegal, but unprofessional and unethical.