@pk wrote:
@Astroboy2024 ,
Having read through this thread and generally agreeing with my colleague @Opus 17 , I have a slight different take on this situation.
You are correct that you don't have to issue a W-2 to your household " employee" but then you have to file Schedule-H.
The main difference of whom is an employee ( W-2 or Schedule-H ) and whom is a subcontractor ( 1099-NESC ) is really the control the employer exerts of how the work is done -- see below note from the IRS.
Hiring Household Employees | Internal Revenue Service (irs.gov)
Also please read the following ( at least peruse through so you are aware :(
p926.pdf (irs.gov)
Schedule H is not required when the household employee is the taxpayer's parent. Follow lines A, B and C on schedule H and the corresponding instructions.
Because schedule H is not required, the difference between the two methods is that with the mother as caregiver, the taxpayer does not get a business tax deduction for the wage, and no one pays household employee tax (social security and medicare tax). With the father as bookkeeper, the taxpayer can deduct the compensation as a business expense but the father must pay self-employment tax (social security and medicare tax).
