Housekeeper

[GulfBreeze]

What is the name of your state? Florida

Last night, our close neighbor friend came over and was very concerned. She had been working for a couple as their housekeeper for the last 2 years. They had an argument and she decided to end the working relationship with them. After she informed them, they told her that they would call the IRS and the local Dept of Economic Security, and inform them that she was working under the table and not reporting the wages. This job from what we know, was only a once or twice a month job to supplement her income from alimony and child support. I don't think she made much, around 100-200 a month tops. She is worried that the IRS will want back taxes and with DES, she said she reported at times but was told that if it was not going to be a regular earnings or it wasn't enough to effect her total for the month, there was no need. We didn't have any answers for her since we are not sure about the legal requirement for reporting housekeeping/babysitting wages.

Does anyone know if such earnings...eg babysitting and minor housekeeping earning are required to be reported? If so, is there an amount that needs to be earned?

Thanks...

 

[moburkes]

Yes, they should be reported.

 

[GulfBreeze]

Yes, they should be reported.

Did she need to have a Tax Payer ID for these type of earnings? How would someone report them since these people never filed any IRS forms as having such an arrangement for hire? Is there a site that I can steer her to for info? thx

PS...so all them kids doing babysitting jobs should be filing a tax return?

 

[pattytx]

She is required to report all income. Period. The employer may or may not have been required to either report or withhold taxes.
http://www.irs.gov/publications/p926/ar02.html#d0e298

 

[TinkerBelleLuvr]

Wouldn't the employer have had to report the income with a 1099-MISC, box 7, for wages paid in excess of $600?

 

[xylene]

Your freinds ex-employers are "stuff" talking to make her sweat.

It isn't her employers business how she files her taxes. If she was their employee they have tax / employer obligations too, and the 'under the table' thingy is a double edged sword...

You friend should do nothing, other than retain an accountant to review her tax and financial situation.

The IRS is just not going to mount a federal case over someones unconfirmed (a realistically unconfirmable) allegation that a third party may have under reported their income by 1200 to 2400 dollars...

None of this is any excuse for / is defense to your friend's failure to ensure her income was reported properly, and moving forward she should should be retaining basic pro tax help.

PS - Babysitters do need to pay taxes.

 

[GulfBreeze]

Wouldn't the employer have had to report the income with a 1099-MISC, box 7, for wages paid in excess of $600?

that was the only advice i could come up with. I knew from past experience, that the other person would normally have a 1099 filed so that the other person could have something to turn into the IRS. I argued that people could make bogus amounts to fraudulently boost their income level if it helped get them more on their EIC. She just didn't keep track of it because it was no regular pay and so little. She knows better now.