I receive assistance from a state funded program for home health care. I have decided to pay my workers additional money on top of what they get from the program to give them extra money. Do I have pay taxes on the extra money I give them? Can I claim this additional money as a medical expense on my taxes?
IRS says that home help is ALWAYS an employee
If you fail to withhold taxes and pay the employer share of Social Security, etc....when you are caught (not if...when) you will be solely liable to pay all those taxes out of your own pocket..and the fines and penalities. Really expensive!
I just hired a payroll service to handle it for my Dad and they do the filing, etc. I get the accounting once a month..and they get a check to cover the quarterly payments to the IRS and State dept of revenue.