Home health care worker

[Feli]

I am helping my mom with her taxes. She is retired but is working through Giving Home Health Care, LLC to help my uncle. They sent her a 1099-MISC for what she made for the year with them. They do not take taxes unless you ask to, and she made quarterly estimated tax payments. When I enter her 1099-MISC into TT, it makes a Schedule C as if she is self-employed. With this it is saying she still owes a significant amount of taxes but that we need to complete the Schedule C as if she is self-employed. Is this necessary and what might I be missing?

[Vanessa A]

It is possible that she is self-employed and will need to file a schedule C if she is considered an independent contractor.  This just means that the company does not treat her as an employee.  The IRS considers you an employee if the company:

1. Has behavioral control meaning they control the how, when and where you do your job
2. Has financial control meaning they control how you are paid (ex. do you get a weekly paycheck based on the hours you work, do they withhold taxes from you wages), have an investment in the equipment used (ex. do they own and maintain the cab or is this an Uber type situation)
3. It looks like an employee/employer relationship (do you have benefits)

Basically, if she was able to pick and choose her assignments and schedule, she was likely an independent contractor.  If she could not and the company had control, you can dispute it.

You can file for SS-8 and let the IRS determine her employment status it you believe they had behavior and financial control over your employment,

In the meantime, to report her income, if she does not agree with her being an independent contractor, you will need to enter her income by selecting the following:

• Income
• Show More next to Less Common Income
• Start next to Misc Income
• Start next Other income not already reported on a form W-2 or Form 1099
• YEs to did you receive any other wages
• Continue through to did you earn any other wages and answer yes
• Select employee compensation that was not reported on a W-2
• Hit continue
• Report your wages and select I received a 1099-Misc for this income use reason code H

Myths About Misclassification

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