﻿How does a private caregiver employer calculate the out of pocket equivalent from 1099 to W2? - AgingCare.com
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I know that each situation will be different but there's got to be some process to approximate. First let's assume\e that I hired caregivers for \$x per hour and at the end of the year, I have spent a total of \$y, then after tax deductions (since my medical costs exceed the threahhold) my net cost fot the caregivers that year = \$z. Is there a formula I can use to figure out how much the hourly wage would be if I were to hire them as employees, pay employer taxes and tax withholding, and after taxes, come up with netting the same \$z?

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From the way you present the question, I think you must have had some algebra, so I would use that to calculate the issues and costs.

If I understand, you're looking at the whole picture, trying to determine the optimum wage to pay, factoring in the variables. I think there are a couple ways of doing it. The less complex would be to create a table or matrix with a series of wages and calculate appropriate deductions. Find your breakeven point, and that would reflect close to the ideal wage.

You could probably use Excel to create the tables.

Another way is to create a series of equations, but it's a lot more manual that way as you'd be plugging in variables and different options.

If you consider a payroll service, remember that that will be a factor in your cost analysis.

Just remembering... I set up a series of linked Excel spreadsheets to keep track of my parents taxes. Each sheet corresponded to a Federal 1040 plus Schedules A, B and D. Every time a med expense was paid, it was entered into the support sheet for Schedule A Everytime a dividend check was received, it was entered in the Schedule B sheet.

Each sheet was linked to the appropriate lines in the 1040, so every time I added an addition to income or deductible expense, the master 1040 was updated.

You could do something similar for the wages, experimenting with a master sheet insteadf of a 1040, using amounts that would correspond to your budget, then working backward. It would be challenging, no question about that. But it could help you identify various workable scenarios for wage rates.
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The IRS considers all in home help to be employees. Beware! If you are not doing payroll...complete with tax withholding, social security deductions, etc...you (not the employee) will be hit with fine, fees, and have to pay all those taxes out of your own pocket.

Yes...they do audit this stuff. The trigger point is about \$1,000 annually.

You cannot give an in home caregiver a 1099 and expect to get away with it.

There are several places that will handle the payroll taxes and pay stubs etc for you.