Dear Moneyist: Due to the 2020 global pandemic, my wife and I have been concerned about exposure to others indoors. We are lucky to be able to work from home, so we are always here and no one else is allowed in our home.
“Is your housekeeper an independent contractor or a W-2 employee? ”
Internal Revenue Service Publication 926 addresses this: “You have a domestic worker if you hired someone to do your domestic work and that worker is your employee. The worker is your employee if he can control not only what work is done, but how it is done. If the worker is your employee, it does not matter if the job is full or part time or if you hired the worker through an agency or from a list provided by an agency or association. “The agency gives this theoretical example:” You will pays Betty Shore to take care of her son and do light housework 4 days a week at her house, “she says.” Even if the employer wants to cut down on the worker’s time and give her a beautiful holiday gift, the result it’s probably the same. The IRS will likely see the gift as payment for not looking for another job because your time was cut, which is the equivalent of paying you for waiting time. ” It’s part of taxes, part of the philosophy of logic. That’s the IRS! What if you are an independent contractor? If you donate $ 600 in a fiscal year, you must submit a Form-1099-MISC. “If only the worker can control how the work is done, the worker is not his employee but is self-employed. A freelancer generally provides their own tools and offers services to the general public in an independent business, ”says the IRS. As an independent contractor, your housekeeper can wear work clothes, fuel / mileage, and cleaning supplies. Thank you for continuing to employ your housekeeper and for finding ways to make your life easier, even if it doesn’t affect your own finances. Your willingness to ease the financial burden on your housekeeper is an act of goodwill in itself. The German philosopher of the Enlightenment Immanuel Kant wrote: “A good will is good not because of what it does or achieves, not because of its fitness to achieve some intended end, but good simply because of its will.” The Moneyist: When my parents died, my sisters and I divided their estate. I chose a painting that can be worth $ 50,000. Should I tell them? Hello MarketWatchers. Check out Moneyist’s private FB Facebook group, + 0.04%, where we search for answers to life’s thorniest money problems. Readers write to me with all kinds of dilemmas. Post your questions, tell me what you want to know more about, or rate the latest Moneyist columns.