Tricky household employment tax requirements can be daunting for families looking to hire in-home help. Fortunately, CareFamily offers full tax management for their clients to make the tax process smooth and easy.
According to the IRS, a household employee is defined as someone who is hired privately and whose work is managed and directed. Whether the caregiver is paid hourly, daily or per job, taxes must be filed for these employees. As a private employer, the family is responsible for ensuring that the caregiver receives the proper documents and information to file their taxes at the end of the year.
Household employees are also responsible for three different income taxes: Medicare and Social Security which is 7.65 percent of an employee’s wages; Federal Unemployment Taxes which is 0.6 percent of the first $7,000; and State Unemployment Tax. The State Unemployment Tax rate varies from state to state, but on average, it is approximately 3 percent and only applies to the first $7,000 to $14,000 or caregiver wages.
CareFamily’s Tax Management:
With CareFamily’s tax management service, families don’t have to worry about any of these details. Through CareFamily, caregivers will receive a W-2 so that caregivers can properly file their taxes hassle-free and all required tax filings and payments will be made on the family’s behalf.
CareFamily partners with an outside payroll company to provide tax materials for the caregiver. CareFamily and the payroll company guarantee that tax documents will be filed correctly and on time, so you don’t have to worry about late fees or making a mistake.
These tax services are included in the additional $3.00 CareFamily fee, along with bonding and liability insurance, so why not take advantage?
Signing up is easy and can be done securely through your CareFamily account. You’ll complete a limited Power of Attorney, which gives CareFamily the ability to file returns and make payments on your family’s behalf. You’ll also fill out a form SS-4 online, which is an identifier the IRS requires to make payments on your behalf.
More information about the income tax laws for house hold employees can be found on the IRS website: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Hiring-Household-Employees