2007 FICA wage threshold for household workers?

Unchanged at $1,500

-- Phil Marti Clarksburg, MD

Whenever I think about this it bothers me. Here's a typical question I field frequently: "We have a person who cleans our house once a week for two hours. For the year we pay her more than $1500. We consider her self-employed because she does the same thing for other families and do not withhold or pay FICA. On the other hand she does use our vacuum, cleaning supplies and so forth. (She decides what to buy, and when, and we reimburse her.) We don't tell her what to do, but occasionally ask that she damp mop a room, double check ceiling corners for spider webs, etc. Otherwise she has discretion on when and whether to perform specific functions. I realize we could hire an agency to do this and avoid the issue, but we like this person." Has this typical family got a problem?

-HW "Skip" Weldon Columbia, SC

It's a complex analysis and does not depend on any one factor. So the fact that she uses the family's vacuum, etc., is not determinative. Telling her to make sure the corners are cleared of spider webs, etc., is telling her the results to accomplish, not necessarily how to accomplish them. So that may not be a problem, either. My suggestion would be to have her register a fictitious name (e.g. ABC Cleaning Service), and get business cards. Even put a listing under the name in the phone book. While that's not part of a strictly legal analysis, that's the kind of thing the non-lawyers who look at these things often find convincing. Stu

They do if they get caught. The housekeeper is clearly an employee IMO.

-- Phil Marti Clarksburg, MD

The fact that family supplies the tools of the trade works against them. Are any of them expecting to be nominated as a Supreme Court Justice?

-- Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

This is a common law issue and varies from state to state.

how ever the following will be very helpful..

1) does she have a business license? 2) does she provide the same services to other clients? 3) do you have a WRITTEN CONTRACT with her? 4) to what degree do you control manner and method of their performance

The fact that she uses your supplies is not helpful.

There is a list of about 20 factors that need to be considered when making this decision.... Jerry Doblie Jerry Doblie, CPA; MS Tax

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