What are the basics?
- The IRS does not consider In-Home Domestic Workers independent contractors (1099).
- Clients act as your direct employers, while CareLinx is the platform you use to connect with clients. This distinction is important to keep in mind as you may work with multiple clients.
- FICA taxes = Social Security + Medicare
- When anything is withheld from your pay, it is visible in the Deductions/Expenses section on your pay stub.
- You have access to all your pay stubs, regardless of the status of your connection with a client. You can access all pay stubs in the Payment section of your account under Financial Activity.
- Clients that join CareLinx are given the option to sign up for HomeWork Solutions (HWS) which is a tax preparation service.
- If they don’t sign up for HWS, your client is responsible for whatever tax form you may require. However, you’ll still have access to your pay stubs to assist with your tax reporting.
- You may not require a tax form if you make under a certain dollar amount with a client.
- If you don’t know whether a client you have worked with or are currently working for is signed up for HWS, call CareLinx and we will let you know.
What taxes may be withheld from your pay?
- FICA taxes
- Unemployment (depending on the state)
Tip💡: If FICA taxes are not withheld from your pay, your employer is responsible for them. However, you cannot opt out of them when they are withheld.
What taxes are not withheld from your pay?
- Federal income tax
- State income tax
- Your income taxes are not withheld, and you’ll be responsible for these at the end of the year.
Tip💡: We recommend you save at least 10% of your earned wages to pay your taxes at the end of the year.
Who gets a W-2 and why?
- A W-2 is not required if your wages are below $2000 with a client.
- Remember, a caregiver working for multiple families may meet the W-2 threshold with some clients but not all which means they’d only receive W-2’s for the clients they made over $2000 with.
- If your client is signed up with HWS, then HWS can give you access to your W-2 online via the Self-Service Portal. You’ll need to call to gain access 1-800-626-4829. A W-2 will also be mailed to your address on file so be sure it’s up-to-date before you start working.
- If you do not meet the W-2 threshold, your pay stubs are sufficient for your tax purposes.
What’s the bottom line?
- W-2’s are not required for hires that have less than $2000 in wages.
- If your clients are enrolled in HWS, then HWS will provide the W-2 if required.
- If your client is not enrolled in HWS, your pay stubs are sufficient as a receipt to file a 1040.
- You are still responsible for reporting your wages and filing an income tax return even if you did not receive a form W-2.
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