Tax Credit Questions for Household Staff
If you’re employed as household staff, it’s crucial to understand how tax credits and deductions might apply to your situation. To ensure you’re both compliant with tax laws and maximizing potential savings, here are some key questions to ask your employer:
- Employee or Independent Contractor?
Clarify your classification to determine if you’re eligible for tax credits and proper withholding. - W-2 Form
Ask if you’ll receive a W-2 at year-end, which is necessary for tax filing and claiming credits. - Tax Withholding
Confirm that taxes (Social Security, Medicare, federal income) are being withheld from your paycheck. - Dependent Care Tax Credit
Inquire if your employer is claiming the Dependent Care Tax Credit for childcare services you provide. - Flexible Spending Accounts (FSAs)
Ask if they’re using an FSA for dependent care and if you can be paid through it. - Medical Expense Deductions
If you’re providing caregiving services, confirm if your employer is using your wages for medical expense deductions. - Home Office Deduction
Find out if your employer qualifies for the Home Office Deduction and if your wages can be included. - Benefits for Tax Savings
Inquire about any benefits (health insurance, retirement plans) that could offer tax savings for both you and your employer. - IRS Compliance
Ensure your employer understands and follows IRS rules for household employment to avoid penalties. - Wage and Tax Reporting
Clarify how your wages and taxes will be reported (e.g., Schedule H, W-2 forms) for accurate filing.
By asking these questions, you’ll better understand your eligibility for tax credits and deductions, ensuring that both you and your employer maximize savings and stay in compliance with tax regulations. Feel free to reach out to our team for more information or if you have any questions!
