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In-Home Caregivers and 2015 Taxes

By Mary-Frances Walsh, 8:00 am on

Tax season is here, and families who have hired or are considering hiring an independent in-home caregiver privately (not through a local Sonoma County home care agency) should understand how their new family arrangement will affect their taxes. Read on for important filing information for 2015.

Household employers who pay their in-home caregiver $1,900 or more in a tax year are required to pay Medicare and Social Security taxes. Additionally, any employer who pays more than $1,000 to their employee in a calendar quarter is obligated to pay unemployment taxes. If your arrangement falls within these categories, here is a checklist to follow to ensure you are in compliance with your legal and financial obligations for 2015.

After Hiring a Household Employee

  • Verify authorization to legally work in the United States
  • Learn about your state’s tax requirements
  • Complete a Form I-9 Employment Eligibility Verification Form

When You Pay Your Employee

  • Withhold Federal Income, Social Security and Medicare taxes
  • Maintain records of all payments and taxes withheld
  • Provide your employee with copies B, C and 2 of Form W-2, Wage and Tax Statement

Know Important Dates for the 2015 Tax Year

If you have already hired an in-home caregiver, then you will need to prepare your taxes according to the following schedule.

  • February 2 – Obtain an employer identification number
  • March 2 – Send Copy A from Form W-2 to the Social Security Administration
  • April 15 – If you are filing a federal income tax return, then submit Schedule H with your return. If you are not filing a return, then you will need to file Schedule H from Form 1040 by itself.

Additional Tax Information to Know

  • As a household employer, it is your legal obligation to inform your employee about the Earned Income Credit. This can be done by providing your employee with Copy B from the Form W-2 Wage and Tax Statement, or you can provide them with a copy of Notice 797 from the Internal Revenue Service
  • To avoid paying taxes in one lump sum, you can pay estimated taxes throughout the year. Use Form 1040-ES to estimate your tax payments and create vouchers that can be used to make quarterly payments.

Finding care for an aging parent or loved one can be stressful enough, without having to worry about filing taxes and paying for workers’ compensation should a privately hired caregiver become injured on the job or in your loved one’s home. That’s why Home Care Assistance Sonoma County provides families with trained and compassionate caregivers who are bonded, licensed and insured, and are employees of our company. We also take care of all caregiver taxes and related paperwork so you don’t have to worry about a thing.

Call us today at 707-843-4368 and schedule a complimentary, no-obligation consultation and learn more about hourly or live-in care for seniors in Sonoma County.