Do I need to pay taxes for short-term help around the house?

I’m 64 and recovering from a stroke. I need help with some tasks that have piled up, like cleaning, tech setup, filing, car maintenance, and getting to appointments. If I can find someone, maybe I could get by with half a day to one day per week. Ideally, I’ll get better and won’t need the help anymore.

I’d rather not go through an agency. If I don’t, do I need to worry about paying taxes for short-term, project-based work? And if I just hire someone once a week, does that change anything?

Thanks for any advice!

Based on what you’re saying, it sounds like this could be classified as a household employee situation, meaning you might have to handle taxes like FICA and income tax if they want you to withhold it. This doesn’t change just because it’s a day or two a week.

Check this for more details: Publication 926 (2024), Household Employer's Tax Guide | Internal Revenue Service

One exception might be if you hire someone who sets their own hours and controls how they do the work, like an independent contractor. But that’s tricky when they’re working in your home.

If you’re on Medicaid, you could look into a Medicaid waiver program, which might help with some of these tasks.

@Joss
Thanks for the info! I am on Medicaid. What’s this Medicaid waiver you mentioned?

Axel said:
@Joss
Thanks for the info! I am on Medicaid. What’s this Medicaid waiver you mentioned?

It’s a program run by each state with its own name, so it varies. It’s designed to help folks get services at home instead of needing to go into a facility.

Here’s a general page on it: What Is A Medicaid Waiver? Your Guide To Medicaid Home And Community-Based Services | AssistedLiving.org

Technically, yes, you’re supposed to pay, but honestly, most people don’t. A lot of this work is done in cash and off the books. Neither side reports it, and it’s rare to get called out unless you’re high profile.

@Blair
Appreciate the reply!

Hey there, sorry to hear about your stroke.

So are you hiring someone, or are you the one getting paid?

If you’re paying someone out of pocket, it doesn’t usually mean you need to withhold taxes unless it’s a formal household employee arrangement. You can pay in cash, by check, or with apps like Venmo.

If you’re getting paid, that’s different. If someone pays you more than $600 a year, you’d need to report that income on a Schedule C. Then, you’d pay self-employment tax on the net income. If you don’t have taxes withheld from other jobs, you might want to make an estimated payment to cover it.

@Lorin
Whoa, this has some issues! Don’t follow this advice without double-checking!

This kind of work doesn’t typically qualify for Schedule C unless you have a registered business, which wasn’t mentioned here.

It’s more likely to be a household employee situation.

@Quinby
I brought up Schedule C because it wasn’t clear if they were hiring help or doing the work themselves.

For folks performing services, how do you suggest they report income over $600 for the year? Should they ignore it?

@Lorin
All income should be reported, regardless of whether you get a form or not.

If it’s a business expense, the payer sends a Form 1099.

Quinby said:
@Lorin
All income should be reported, regardless of whether you get a form or not.

If it’s a business expense, the payer sends a Form 1099.

And where exactly should this income be reported?

@Lorin
If it’s truly business income, it goes on Schedule C.

Quinby said:
@Lorin
If it’s truly business income, it goes on Schedule C.

And do you see any other options?

@Lorin
I’m planning to hire someone to help me, so I’ll be the one paying. Does that mean it’s the worker’s job to report the income and handle taxes?

Axel said:
@Lorin
I’m planning to hire someone to help me, so I’ll be the one paying. Does that mean it’s the worker’s job to report the income and handle taxes?

It’s a bit more complicated than that. You might still be on the hook for the nanny tax.

Here’s a guide on it: Nanny Taxes: A Complete And Comprehensive Guide for 2024

Or you can look for a handyman or someone who operates as a business — then it’s just a service you’re buying, no employer-employee relationship.

@Lorin
Got it, thanks!