Let us begin this blog session with the requisite disclaimers. I am not a lawyer, tax consultant, employee of the Internal Revenue Service, or nuttin’ else that should cause you to consider what follows as “expert” advice. And as I am sure you already realize, the things that I will point out are self-serving inasmuch as I believe they will lead you to the realization that you should have your house cleaning done by Accent Maid Service, Inc. rather than by a “private” individual.
So - how do I think you could become a felon doing something as innocent as getting your house cleaned?
Well, according to my understanding of the IRS and its rules, it is by having an individual clean your house and not doing the requisite things – and doing them on time: w-4’s, w-2’s, quarterly reports, setting up an account and remitting money to the IRS each quarter – by computer because the IRS doesn’t like paper anymore.
I have read that these things are necessary if you pay a household employee as little as $1500 in a year’s time and that to not do so is a felony.
In addition, I just learned something else – should you be pursued by the IRS for this miscreant act, you could lose professional licensing. So if your profession requires licensing – the medical professions, the legal professions, for example - you could possibly lose your whole career, if push comes to shove.
SOME WAYS THAT PEOPLE TRY TO AVOID PAYING TAXES ON HOUSE CLEANING
Now I know some of you are thinking that you can just go the 1099 route, but the IRS has apparently made explicit in its rules regarding house cleaning that you cannot do that with individuals. The courts have upheld such rulings. (Once again, this is not expert advice – only what I have gleaned from combing the internet and reading information provided by the IRS.)
Or maybe you are thinking of just paying cash and forgetting it. I suppose that might work – even though it is illegal - as long as you can count on your cleaning person also “forgetting it.” But apparently – as I understand it – that person can inform the IRS at a later time (years and years later?) that they cleaned for you. Why would they do so? Perhaps because down the road they realize that Social Security or maybe medical support is important to them and either deliberately or accidentally reveal that you and they were not following the rules - so that they can have the money that they earned cleaning for you count towards those social programs.
What could follow then might be very expensive because, along with attempting to recover moneys that the IRS believes should have been remitted, there will be interest and penalties. And it might be really expensive if the person who cleaned for you is ultra-generous in his or her recollections of how many total hours they cleaned and what they were paid in toto. (Wow – I am using Latin. But I am still no lawyer.) By paying cash you would have no records to refute their potential assertions in a “he-said, she-said” situation. On the other hand, if you have records because you paid by check in such a situation, you are really asking for trouble, it seems to me. (“Off-the-record” and “under the table” do not jibe well with “paper trail.”)
In addition, depending on who you are or what you aspire to, public exposure of such negligence could hurt you. The term nannygate was coined when certain political appointments were scotched in the early 1990’s because of non-compliance with this particular part of the tax code. And there are examples galore on the internet of other people who suffered professionally or politically through the years right up to the present because of playing fast and loose with this law (these laws?) You can look them up on the internet, should you wish.
And there is the scorn of your neighbors who – should word get out of your scoff-law ways - will no doubt line the street to jeer at you in your everyday comings and goings. Well, they might. At the very least you could be exposed to cocktail-party Schadenfreude. (In part, I wanted to use the term Schadenfreude to see if the Word program knew it or if it would flag it as some kind of error. It knew. Wunderschoen.)
AND NOW THE COMMERCIAL FOR ACCENT MAID SERVICE
Accent Maid Service, Inc. follows all laws, rules and requirements, federal and state, pays all taxes, federal and state, and has been doing so with a clear record for the past 34 years. By hiring Accent Maid Service for your house cleaning, the legal fuss and muss becomes ours to take care of.
Incidentally, the IRS itself estimates that doing things correctly in terms of documenting everything, maintaining records, submitting forms, making payments, etc. will take the average homeowner an hour a week. Indeed, we have a part-time secretary who pretty much does just payroll, reporting, etc. for up to 15 hours a week. And that is through the utilization of specialized computer software.
There is another reason, in my opinion, to use Accent Maid Service and that is fairness. Our cleaners make a decent and fair amount. They must be, because we have had people working for us for as long as 13 years. In addition, we have had friends and family of our employees seek work with us after hearing of their treatment here and the money they can make; not over-the-top pay certainly, but fair. Some have come back to visit after leaving us, saying they have never worked anywhere where they had such pleasant boss-employee relations. And some have come back to work after leaving for one reason or another.
In addition, some have truly considered us as friends, inviting us to wedding and baby showers, 
birthday parties, and other family events.
That is not to imply that Accent Maid Service is a social program at its heart. It is not. It is a for-profit business and run accordingly. But nonetheless, Accent Maid Service is run with the dignity of our people at its heart and reasonable financial remuneration is an important part of that.
Incidentally, tax consequences are not the only thing you risk should you go the cash-under-the-table route. There are also the questions of liability, damages and accidents. As the home-owner, guess who holds the short end of the stick with any such problems involving private individuals in your home. That’s right – you do. Not so with Accent Maid Service. We are fully insured, bonded, and we stand behind even minor accidental damage.
Once again, do not consider this blog to be expert advice. Instead, should you desire more information on hiring an individual to clean versus using Accent Maid Service, contact a lawyer, financial adviser, or expert of your choice.
Or just call us and eliminate those concerns.
We've been providing local, trusted cleaning services since 1982 in Indianapolis, Carmel, Zionsville, Westfield, Fishers, Noblesville, Whitestown, Lawrence, Meridian Hills, Broad Ripple, Nora, Downtown, and anywhere close by.